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IRS identifies the 12 major tax scams for 2018

The IRS released its annual compilation of "Dirty Dozen" for 2018 highlighting the most common scams to which taxpayers will likely face in the approach of the tax season.

In announcing the listing for 2018, the IRS strongly encourages taxpayers to remain vigilant not only during the tax season, but throughout the year. The agency claims that scams are becoming increasingly aggressive with scalable programs ranging from simple to sophisticated. There is a common theme in the previous lists, with phone scams, phishing and identity theft appearing as eternal favorites among scammers.

For small businesses, the threat environment is growing because they are now the target of 43% of cyber-attacks. And with more services, including taxes, made digitally and online, it is extremely important to have strong security measures in place to protect the data of your business and that of your customers.

2018 Tax Scams – The "Dirty Dozen"

Phishing: Do not open e-mails or click on the hyperlink of a website if you do not know where it comes from or where it leads you (IR-2018-39

Phone Scams: Callers spoofing the identity of IRS agents continue to be one of the biggest problems for taxpayers. These callers threaten taxpayers with police arrest, deportation and revocation of licenses. The IRS does not make such threats (IR-2018-40).

Identity Theft: Monitor your social security number and other financial records to ensure that your identity has not been stolen. Identity thieves use personal information to file tax returns and other financial scams (IR-2018-42).

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Return Preparer Fraud: If you are using a tax professional for the first time, follow up to make sure your identity has not been used for fraud, identity theft and other scams. While most professionals are honest, the IRS claims that some are unscrupulous (IR-2018-45).

False Charities: If you make donations as part of your tax return, make sure that the charity is legitimate. The IRS provides tools to check the status of charities (IR-2018-47).

Inflated Refund Claims: If you are promised an inflated tax refund, it might be too good to be true. Only use legitimate professionals of the tax return (IR-2018-48).

Abusive Claims for Business Credits: Do not be fooled into claiming unsupported credits for your business or you may incur penalties. (IR-2018-49)

Deductions Falsely Capitalized on Tax Returns: Just as you should avoid improperly claiming tax credit, you should also avoid inflating deductions or expenses to pay less or receive refunds more important.

Forgery of income to claim credits: If you did not earn income, do not ask for tax credits. The IRS warns taxpayers will face significant bills to pay back taxes as well as interest and penalties (IR-2018-55).

Frivolous Tax Arguments: The penalty for filing a frivolous tax return is $ 5,000, so do not be fooled by extravagant arguments for not paying your taxes ( IR-2018-58).

Abusive Tax Shelters: There are legitimate tax shelters, but there are also many that are not. The IRS recommends that taxpayers consult an independent opinion regarding these offers (IR-2018-62).

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Offshore Tax Avoidance: If you avoid your tax obligations with offshore schemes, the IRS reminds everyone that it has a history of successful coercive actions against offshore cheating. The agency says individuals and organizations guilty of breaking the law by failing to report accounts abroad are better served by coming voluntarily and allowing themselves to be taken over by their obligations. (IR-2018-64).

One last note

The IRS warns you that you are legally liable for what appears on your tax return, even if it is prepared by someone else. You can protect yourself by choosing a reputable tax preparer and keeping a close watch on your personal financial records throughout the year, not just during the tax period.

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