Estate Planning and Tax Lawyer Blog

The Internal Revenue Service wants taxpayers to be conscious of tax scams. These illegal scams can lead to possible problems for taxpayers including possible criminal prosecution, interest, and significant penalties. They can take several forms, ranging from illegal ways of “untaxing yourself” to promises of large tax refunds. Three important things to keep in mind: 1) you, alone, are responsible and liable for the content of your tax return; 2) anyone who promises you a bigger refund without knowledge of your tax situation is most likely misleading you; and 3) never sign a tax return without looking it over to assure its accuracy. Some common schemes include return preparer fraud, identity theft, and frivolous arguments. With return preparer fraud, just remember that if it sounds too good to be true, it probably is. Dishonest tax return preparers derive financial gain by skimming money of client’s refunds and charging inflated fees for return preparation services. The IRS is implementing several requirements that will help increase confidence in the tax system. When dealing with the possibility of identity theft, it pays to be choosy when disclosing personal information. Frivolous arguments include things like the Sixteenth Amendment concerning congressional power to establish and collect income taxes was never ratified; that wages are not income; that filing a return and paying taxes are merely voluntary; and that being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy. Do not believe these arguments. For more information about these or other tax scams, you can visit the http://www.irs.gov.