Some people will do just about anything to lower their income tax bill, which means they could be victims of a variety of tax scams.
Nobody is ever eager to pay income taxes and the con-men know this. The BBB is advising consumers not to be fooled by outrageous claims when someone says there are secret ways to escape paying taxes. Instead of limiting your tax liability, tax scams will only separate you from even more of your hard-earned cash.
Among the typical tax scams:
- "Instant" or "rapid" tax refunds could be actually short-term, cash-advance loans with a high interest rate;
- Unscrupulous tax return preparers will fabricate expenses on their client's return and then charge an inflated fee after "guaranteeing" a larger refund;
- Fast-talking promoters looking for a big commission will urge taxpayers to transfer assets into trust accounts, out-of-state corporations or overseas bank accounts in the Bahamas, which may not deliver the tax reduction benefits as advertised;
- Starting a phony church or a bogus home-based business, or claiming tax credits for Civil War slave reparations or Americans with Disabilities Act entitlements -- in order to absolve yourself of taxes, child support and other debts -- is likely to draw the swift attention from the Internal Revenue Service;
- Identity thieves posing as IRS agents will lie about depositing big refunds in exchange for personal information, such as bank account, Social Security and credit-card numbers.
The BBB advises consumers to carefully choose a tax preparer. No matter who prepares a return, the taxpayer is ultimately responsible for all the information on that return, along with any resulting back taxes, interest and penalties as a result of tax evading schemes.
For additional tips, warnings and scam alerts, please visit www.sd.bbb.org.