ARE YOU SMARTER THAN A 5^TH GRADER?

Every year, the Internal Revenue Service puts out a list of tax scams. These are scams that taxpayers try to pull on the IRS or scams other people try to pull on taxpayers. Either way, it is important that you don’t fall victim to these scams.

I provide this information for two reasons: 1) I still receive calls from taxpayers regarding these scams and 2) I still get taxpayers wanting to try to pull these scams on IRS. The IRS is smarter than a 5^th grader!

Taxpayers pay attention. These things are actually happening. For the first time, here is a recap of actual scams that have occurred since January 1, 2015:

• Phone Scams: Aggressive and threatening phone calls by criminals impersonating IRS agents remains an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent months as scam artists threaten police arrest, deportation, license revocation and other things. The IRS reminds taxpayers to guard against all sorts of con games that arise during any filing season.
• Phishing: Taxpayers need to be on guard against fake emails or websites looking to steal personal information. The IRS will not send you an email about a bill or refund out of the blue. Don’t click on one claiming to be from the IRS.
• Identity Theft: Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number.
• Return Preparer Fraud: Taxpayers need to be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest high-quality service. But there are some dishonest preparers who set up shop each filing season offering cheaper return service.
• Offshore Tax Avoidance: The recent string of successful enforcement actions against offshore tax cheats and the financial organizations that help them shows that it’s a bad bet to hide money and income offshore.
• Inflated Refund Claims: Taxpayers need to be on the lookout for anyone promising inflated refunds. Taxpayers should be wary of anyone who asks them to sign a blank return, promise a big refund before looking at their records, or charge fees based on a percentage of the refund. Scam artists use flyers, advertisements, phony store fronts and word of mouth via community groups and churches in seeking victims.
• Fake Charities: Taxpayers should be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities.
• Hiding Income with Fake Documents: Hiding taxable income by filing false Form 1099s or other fake documents is a scam that taxpayers should always avoid and guard against. The mere suggestion of falsifying documents to reduce tax bills or inflate tax refunds is a huge red flag when using a paid tax return preparer.
• Falsifying Income to Claim Credits: Taxpayers should avoid inventing income to erroneously claim tax credits. Taxpayers are sometimes talked into doing this by scam artists.

• Excessive Claims for Fuel Tax Credits: Taxpayers need to avoid improper claims for fuel tax credits. The fuel tax credit is generally limited to off-highway business use, including use in farming.
• Frivolous Tax Arguments: Taxpayers should avoid using frivolous tax arguments to avoid paying their taxes. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe.

If you have any questions or need help figuring this out, please give me a call at 714-252-5822.

Karla Dennis

As seen in Forbes Magazine, Karla Dennis is an expert tax and business strategist. As an enrolled agent, Karla is licensed to represent taxpayers in all 50 states. She holds a Masters in Taxation and Business Development and is the author of two books, Tax Storm and Against the Odds.

Karla, CEO of consultancy firm Karla Dennis And Associates, Inc.™, has saved her clients thousands of dollars and has been featured in various media outlets such as Forbes, MSNBC, KTLA, Yahoo! Finance, and SmartMoney, marking her as the ultimate tax expert.

As of 2014, Karla became the new host on the “Mind Your Business” radio show, KTLK AM 1150, sharing her financial and business knowledge with the greater Orange County and Los Angeles areas. As a supporter of women’s rights and issues, Karla is part of the Women Network, an organization built to educate and mentor women. In addition, Karla is the radio host for Women Network Radio, a show that aims to uplift and empower women of all walks of life.