Heading into April, tax season is now in full swing. With the April 15th “Tax Day” due date quickly approaching, Americans filing their income taxes should be aware of increasingly-sophisticated scams. Geared towards taxpayers eager to secure a large refund, the scammers employ a wide range of tricks to prey on individuals.
One practice that accounts for a significant portion of tax fraud incidence is identity theft. A crook will use stolen social security numbers to file fake tax returns for the refunds; this usually occurs early on in the season before people have time to file themselves. The IRS also warns taxpayers to use caution in regards to phone calls and emails from people claiming to be from the IRS or promising large refunds. Another scam to watch out for is return preparer fraud; tax preparers may claim inflated expenses, claim fake deductions, inflate deductions, or manipulate income figures. They, in turn, profit from the inflated returns. If a tax preparer encourages you to exaggerate figures or sign a blank return, he or she should most likely be avoided. Being informed about these tricks, in addition to using a trustworthy preparer, is the best defense against tax scam!