New Tax Scam Trick of Scammers

Last updated on March 18, 2022

Due to the recent changes in the country’s economy, more and more people are becoming self-employed, running businesses from their homes. It gives an opportunity for unscrupulous tax preparers to falsify information on their tax returns to gain big refunds.

Self-employed should be wary of tax preparers that try submit false information on their tax return, including claiming false deductions and credits, and declaring personal expenses as business expenses. The IRS tracks 1099 taxpayers more closely because most intentional tax return inaccuracies are filed from the self-employed, with or without their knowledge.

Scam tax preparers have been known to advise taxpayers in decreasing their tax liability by claiming their personal expenses as business expenses. It is the temptation of saving money that makes many taxpayers work with scam tax preparers to file false tax returns.

Taxpayers who are found guilty of intentionally defrauding the IRS may face penalties and/or jail time. To make tax preparers accountable, the IRS began to provide them with unique Preparer Tax Identification Number (PTIN). This would act as a tracking number for all returns submitted by that preparer.

The IRS is making efforts to limit, if not stop tax fraud. It is only after the tax season is over and taxpayers have received their tax refunds that we will know how the IRS fared in its war against tax fraud. Until then, taxpayers should limit their tax liability by legal means, and not be swayed by scam tax preparers.