Peak Performance: Tips You Can Use
Volume 7,  Issue 3
March 2015
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Phishing and Tax Fraud and Scams, Oh My!

In the interest of helping taxpayers guard against identity theft and tax frauds, the IRS has come out with a list of what they are calling the "Dirty Dozen" Tax Scams for 2015. We want to highlight a few, of the "Dirty Dozen" items below, that we believe are most important for you to know.

  1. Phone Scams: Aggressive and threatening phone calls by criminals impersonating IRS agents remain 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. A Summit staffer received four such calls just this January! The calls ranged from intimidating to cajoling. If you receive a call like this, hang up. Do not offer any personal information and never provide payment of any kind. If the IRS wishes to contact you, it will do so by mail, not through a phone call.
  2. Phishing: At tax time and any time of the year, be extremely cautious of emails asking you to confirm your personal information. The IRS will not send you an email about a bill or refund unexpectedly. Do not click on an email claiming to be from the IRS that takes you by surprise. Taxpayers should be wary of clicking on strange emails and websites. They may be scams to steal your personal information. The IRS aggressively pursues criminals who file fraudulent returns using someone else's Social Security number. The IRS is making progress on this front but taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim. 

    Phishing comes in many forms. Earlier this year, scammers sent out emails asking Turbo Tax users to update their software to comply with new tax laws.  In one variation, the email link took unsuspecting taxpayers to a decoy site that infected their computers with a virus. Another variation asked taxpayers to verify they had legitimate copies of Turbo Tax software by providing personal information. That information was then used by the thieves to file fraudulent tax returns for collecting refunds. The taxpayers were unaware of any problems until they tried to file their returns through Turbo Tax but received notices that their returns were rejected because someone else had already filed using their social security numbers. Experts say the best way to avoid this scam is not to provide any personal information to a third party. Legitimate companies will not ask you to upgrade software by sending out emails asking you to click links. Even if you are extremely cautious with your email, the reality is that there are plenty of places where criminals can obtain stolen personal information. Never use a Wi-Fi connection to file your tax return or access sensitive documents.
  3. Tax Return Preparer Fraud: If that's not enough, you should also be wary of unscrupulous tax return preparers. Most tax professionals provide honest service. Still, some dishonest preparers set up shop each tax filing season to perpetrate refund fraud, identity theft and other frauds that hurt taxpayers. 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. The IRS estimates that 60% of taxpayers use tax professionals to prepare their returns. Regardless of who prepares your return, you are legally responsible for the information on it
  4. Inflated Refund Claims: Be suspicious of anyone promising inflated refunds. If your preparer asks you to sign a blank return, promises a big refund before looking at your records, or charge fees based on a percentage of the refund, run! This person is not a professional watching out for your best interests.  
  5. Frivolous Tax Arguments: Paying taxes is a necessary evil that keeps the American economy running. Taxpayers should not use frivolous tax arguments to avoid paying their taxes. For example, the premise that that tax system is "voluntary" is incorrect, sorry to say! So is claiming to be a resident of your state but not the United States and therefore not subject to federal tax. There is case law to support these, if you are interested. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. These arguments are wrong and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes. The penalty for filing a frivolous tax return is $5,000. 

Phone scams, email phishing schemes and return preparer fraud are among the "Dirty Dozen" tax scams the IRS highlighted for 2015.  Visit for additional information on these and other tax-related scams.  Or contact us with questions and comments.