Each year, the Internal Revenue Service releases a list of the 12 most popular tax scams for the year. The 2008 list is out, and I thought it would be fun to go through them individually to show you how criminals are trying to take advantage of taxpayers. The basic idea behind all of these scams is simple: prey on a taxpayer’s fear of the IRS or their desire to avoid paying taxes.
Use the information here to help avoid being taken advantage of by a scammer who wants your money. And use this basic rule of thumb for any offer or communication regarding taxes: If it sounds too good to be true, it probably is. Don’t get fooled by claims regarding mysterious refunds or tax bills. When in doubt contact the IRS directly for help with your situation.
One common scam involves charging taxpayers a fee in exchange for helping them avoid paying taxes… using what the IRS calls “frivolous tax arguments.” Essentially, these arguments are bogus claims regarding the tax law that the scammers use to make you think you don’t have to pay income taxes.
Quite simply, these are fraudulent tax avoidance schemes, and you can end up in a lot of trouble if you use them. Don’t pay these scammers a fee for wrong advice which could cost you a lot of money down the road in taxes, interest, penalties, and legal fees. Follow tax advice only from a reputable tax preparer.