By Jason Green, CPA
The IRS recently issued a warning about a surge in tax scams targeting taxpayers. These scams often involve fraudulent claims and deceptive practices that can lead to significant financial loss and delays in receiving legitimate tax refunds. The IRS highlights several prevalent scams that taxpayers should be aware of.
One of the notable scams involves the fuel tax credit. Fraudsters convince taxpayers that they qualify for this credit, even when they do not. This results in inflated refund claims, which ultimately get flagged by the IRS, leading to delays and possible penalties for the taxpayers.
Another common scam targets the sick and family leave credit. Scammers promote false eligibility criteria to persuade taxpayers to claim credits they are not entitled to. This not only causes issues for taxpayers when the IRS reviews these claims but also adds to the backlog of refund processing, delaying legitimate refunds.
Household employment taxes are also a focus for scammers. They mislead taxpayers into incorrectly reporting household employees and associated taxes, often leading to audits and additional scrutiny from the IRS. These scams typically involve promises of large refunds or reduced tax liabilities, which can be very enticing but are ultimately fraudulent.
The IRS also cautions against phishing and smishing scams, which have become increasingly sophisticated. These scams use emails and text messages to trick taxpayers into providing personal information or clicking on malicious links. These attacks can lead to identity theft and unauthorized access to sensitive financial information.
