Tax fraud is growing more common everyday. This year the IRS received more than a million false tax returns, 72% up from the previous year. Filing false tax returns for extracting big refunds from the IRS is not a new trick for scammers; it is the one that is easiest to operate. Anybody with a computer and a crooked mind can run a tax scam, but its repercussions are serious.
A California man along with 15 co-conspirators was exposed of tax fraud that would have cost the IRS $100 million. He, along with his “team”, filed more than 250 false tax returns to obtain tax refunds worth millions. Poynter, the main accused, pleaded guilty. He is awaiting trial.
Carrying out a tax fraud by claiming false tax refunds is easy. It is a paper crime where the criminal fills out false tax information on behalf of a taxpayer and receives huge sums of money from the IRS in refunds. Criminals use online tools such as fake websites and emails to obtain sensitive financial information from taxpayers and use it to file false returns. Taxpayers are therefore advised not to share their personal and financial information with unauthorized online sources.
Tax fraud can be found in the most unlikely of places. Making headlines under the banner of tax scams are some tax resolution companies. Their fraud was discovered after numerous consumer complaints piled up against them. These fraudulent tax companies used deceptive advertising, false promises, large up-front fee and hidden costs to extract as much money as they could from their clients for little to no service.
Fraudsters depend on people who will believe their lies. If people spot their fraud and report it to the IRS or the FTC, it will help curb tax fraud. Sharing information about the methods scammers use to victimize taxpayers is a simple step to greater protection.