While tax season may be a time of dread for some, it is welcomed with open arms for those expecting a tax refund check. For some people, their tax refund will be the largest check they see this year; especially those who rely on Social Security disability payments to make ends meet.
Unfortunately, there are unscrupulous people who also seek tax refunds…just from other, unsuspecting taxpayers. To make things worse, these scam artists know that you are likely to spend your refund, or turn it over if they say the “right” things. Because of this, the Internal Revenue Service recently announced a list of scams that consumers should be aware of. Through this post, we will highlight a few of them.
Inflated refund scams – The average tax refund this year is about $3000, but some tax preparers are touting their ability to get customers much more than this. If a tax firm is making wild claims about how much money they can get you, avoid them at all costs.
Fake charities – Around this time of year, a number of charities seek donations. The reasons are obvious: charitable donations help to reduce a taxpayer’s taxable income. However, before you donate, make sure that the charitable organization is legitimate. To help in your search, the IRS has a search feature on its site that can help in answering this question.
Unsupported legal arguments – Don’t be fooled by arguments claiming that paying taxes is an unconstitutional infringement on your liberty as an American citizen. Also, abusive tax shelters can also get you into trouble. If you are sure that you are on sound legal grounds, just remember that the U.S. Tax Court issues penalties against those who advance frivolous legal arguments.