Don’t fall victim to these tax preparation rip-offs. Tax preparation scams affect countless taxpayers every year. And just like you, the victims never thought it would happen to them. Fraudsters prey on innocent people every season with alluring ads and promises of bigger refunds. However, before you let anyone touch your return, make sure you know how to avoid some of the most common tax scams.
Think Twice If It Seems Too Good to Be True
When it comes time to file your taxes, you’ll probably see numerous ads on the television, internet, or radio. What do many of these advertisements have in common? They all promise hefty refunds. Before you run out and sign up for their services, however, you need to realize that no one can guarantee a refund without evaluating your situation. Those who claim all their clients get back money are usually scammers. You may have to face the hard truth—not every taxpayer gets a refund. And some may find out they owe more.
If you don’t like paying Uncle Sam, you’re not alone. Taxpayers look for every loophole to avoid paying even a cent more than necessary. While you may be eligible for certain deductions, you can’t legally claim more than your fair share. Not every deduction applies to every taxpayer, and a reputable preparer will help you only select the ones for which you qualify.
You Must Claim Every Dollar You Earn
Have you ever heard someone brag about their employer paying under the table? This phrase refers to companies who choose to pay their workers in cash. While cash is an acceptable form of reimbursement, both employers and employees must record these payments. If a tax preparer doesn’t require you claim your cash payments, run away as fast as you can!
Sure, it may tempt you to avoid paying taxes on cash payments. After all, how will the IRS ever find out? Here’s the problem: assuming the government does catch on—and trust us, they will—you will end up owing even more in back payments and penalties. And since lying on your tax return is a federal crime, you could end up doing time behind bars. Only choose honest preparers who will help you claim every cent you earn.
Don’t Talk to “IRS” Strangers
Another tax scam doesn’t involve legitimate preparers but rather strangers. Many people report receiving threatening phone calls or emails from the IRS demanding payment. Of course, if this happens, your heart may skip a beat. Do you owe the government money? Will you end up in jail if you don’t pay? Before you open your checkbook, remember this: the IRS never initiates contact via telephone, social media, or email. If you owe money, the IRS will mail you a bill.
That’s right. The IRS uses snail mail as the primary (and only) way to begin communications with taxpayers. If you want to speak to someone over the phone, you must call them—not the other way around. Never open any attachments or click on links in an email. These links may redirect you to a fake government website. If you receive a call, text, or email from someone claiming to be an IRS official, report it to the police.
Trust Your Return with an Honest Preparation Service
When it comes time to prepare your taxes, it’s best to hire a professional to do it for you. Government rules and regulations change all the time, and you need someone who can make sure you accurately fill out every form.
Incompass Tax, Estate & Business Solutions can help you take control of your tax returns. With over 29 years in the industry, there’s no scenario we haven’t encountered before. We’ll do your taxes right the first time. Get in touch with us if you want to avoid the latest tax preparation rip-offs this season.