Saturday, 25 February 2012

Popular Tax Scams of 2012

From sophisticated identity theft to ‘free money’ fliers in local churches, the Internal Revenue Service is warning against a wide variety of tax-related scams.

The agency is specifically warning about the increasing number of cases involving the use of stolen identification to file tax returns and claim refunds. Persons, who receive a notice from the Internal Revenue Service informing them that there has been more than one tax return filed in their names, must be alerted to possible identity theft. If you have received a notice from the IRS informing you that you have received wages from an unknown employer you have never heard of, that should be another indication that you may have possibly become the victim of identity theft. In such cases, you must get in touch with the IRS Identity Protection Specialized Unit immediately.

Another low-cost, but highly popular scam that the Internal Revenue Service is warning about is the free-money scams that are perpetrated at local community organizations, like churches. The scams involve the distribution of flyers advertising money from the Internal Revenue Service in churches and other localities. Because churches are tight knit communities, such scams can be allowed to spread unchecked, mainly through word-of-mouth. For instance, unsuspecting taxpayers may be lured in by the promise of Social Security rebates or refunds, which needless to say, do not exist at all.

California tax attorneys are also often called in to undo the damage caused by ‘consultants’ who encourage taxpayers to transfer their assets into trusts, in order to avoid taxes. An offshore trust has its own purposes, and these are always legit and valid. However, to establish an offshore trust for the sole purpose of avoiding taxes is never recommended, and often backfires.