IRS Warns Against Tax Scams

Tax refunds put large amounts of money in peoples’ hands, meaning tax season provides opportunities for con artists to prey on unsuspecting marks. The Internal Revenue Service is attempting to get ahead of the game by sending out warning signs of potential scams in a press release sent through the Better Business Bureau.

Here’s what to look out for:

* Don’t work with a tax preparer who bases his fee on a percentage of your refund.

* If your tax pro refuses to sign the return and give you a copy, go elsewhere.

* Verify that your tax pro is an attorney, certified public accountant or enrolled agent. Those are the only people who can represent you if the IRS decides to press you about your return.

* If you suspect tax fraud, file a form 3949-A (PDF) to report it.

(Thanks, Nick!)

Comments

Edit Your Comment

  1. Bsamm09 says:

    “Don’t work with a tax preparer who bases his fee on a percentage of your refund.”

    —This prohibited per Circular 230 (There are limited times this is acceptable. Not on filing of original return though)

    “Verify that your tax pro is an attorney, certified public accountant or enrolled agent. Those are the only people who can represent you if the IRS decides to press you about your return.”

    —This is incorrect. http://www.irs.gov/publications/p947/ar02.html#en_US_publink1000148595

  2. MrMagoo is usually sarcastic says:

    The IRS warning us about tax scams is kind of like Taco Bell warning us about the dangers of junk food.

  3. RiverStyX says:

    Oh they’re one to talk. I guess the federal government just doesn’t like the competition.

    Seriously the irony is so thick only they could do this to themselves, considering taxes themselves and what the government does with our money is a scam..wasting it on the war on drugs, bailing out banks and throwing it down the toilet trying to repair our roads instead of looking for an alternate source of transportation. What happened to the light-rail in orange county, assholes?!

    And social security? Even worse, america’s #1 pyramid scheme that the government spent thinking they wouldn’t need the money.

    • RiverStyX says:

      And as far as the IRS taking reports of fraud seriously? What a joke! Several years ago, I worked for a computer company that was fraudulently classifying me a 1099. I complained to the IRS after he fired me for calling him out, the IRS did jack shit, didn’t even write me back, and the unemployment office took his side by saying I quit.

      • TuxthePenguin says:

        Fraudulently claimed you as a 1099? That’s kind of difficult to do. Those lines are very bright. Did they withhold anything from your paychecks?

        • RiverStyX says:

          What do you mean difficult to do? He got away with it for six months. He was a shyster from south america, probably overstaying his visa by now, who paid me with a check every week and said I was a 1099. It was only until I looked online and inquired as to what the qualifications were for a 1099 that I realized he was screwing me out of an ungodly amount of money and benefits by not reporting my earnings and withholding taxes.

          After that whole fiasco, I realized that the federal government does not give a fuck about me or you. They’re inefficient, unmotivated, and live only to make themselves rich. I for one can not wait until the social security racket finally catches up to them in 10 years.

    • TuxthePenguin says:

      “What happened to the light-rail in orange county, assholes?!”

      Why should the federal government even be involved in what is explicitly a local project?

  4. eeelaine says:

    The IRS also administers several programs where elderly or low income people can get taxes done for free – look for the VITA or TCE programs in your area. These clinics are often staffed by volunteer law students & accountants, and can either help you with your taxes or point out reputable tax professionals in your area
    http://www.irs.gov/individuals/article/0,,id=107626,00.html

  5. dush says:

    Did they mention Walmart?

  6. smartmuffin says:

    Step 1. Vote for Ron Paul
    Step 2. No more IRS
    Step 3. Tax scams averted

  7. operator11 says:

    From personal experience, stay AWAY from shady tax preparers. It took several years to pay back, and audits are NOT fun. And, yes, his fee was a percentage of my return.

    • lyllydd says:

      Shadiest ones in the biz? H&R Blockheads! Seriously. We used them a grand total of twice, and they botched our taxes badly both times. Most of them are people who work in completely unrelated fields and who are just looking to make a quick buck at tax time.
      Oh, and if you live and work on the border between 2 or more states, don’t go to a tax service at all. Go to a legitimate CPA. ‘Tax preparers’ and ‘tax professionals’ have no idea how to file if you have income from more than one state.