Newspaper article Sarasota Herald Tribune

IRS Telling Us How to Avoid Proliferating Taxation Scams

Newspaper article Sarasota Herald Tribune

IRS Telling Us How to Avoid Proliferating Taxation Scams

Article excerpt

THE ANNUAL "DIRTY DOZEN"list of tax scams is out, and the Internal Revenue Service is again warning Florida taxpayers not to fall for them -- or take part in them.The scams run year round but become more prevalent as the deadline nears for filing taxes, which is April 17 this year."Scam artists will tempt people in person, online and by email with misleading promises about lost refunds and free money," said IRS Commissioner Doug Shulman.Identity theft tops the 2012 list, with the IRS seeing increasing attempts by ID thieves to use legitimate taxpayer identities to file returns and claim fraudulent refunds.One tip-off is an IRS notice to the taxpayer that more than one return was filed in their name.Last year the agency says it blocked more than $1.4 billion in refunds from getting into the wrong hands on ID theft attempts.Phishing was second on the list. This long-running scam typically involves an unsolicited email or a website that entices consumers to disclose personal or financial information. The IRS, the FDIC and other government agencies have recently warned about scammers using their names and logos for phishing scams.Another ongoing problem is return preparer fraud. About 60 percent of taxpayers will use a professional tax preparer to file this year, and the IRS says most of them are legitimate.But some preparers have been caught skimming their clients' refunds, charging inflated fees or falsely promising huge refunds to attract business.Preparers are now required to have a tax identification number that must be entered on each return. The IRS recommends not signing a return without that number, and to watch for preparers who charge a percentage of the refund as their fee.Hiding income offshore popped up again, as well, on the Dirty Dozen list. While it is legal to maintain offshore financial accounts, U.S. taxpayers are required to declare income and pay taxes on them.In 2009 the agency launched a voluntary program for taxpayers to reveal those accounts and resolve tax obligations. …

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