Federal Reserve & Interest Rates

This month the Internal Revenue Service released its “Dirty Dozen” list for the top tax scams of the year. The list includes both scams that cheat individuals out of their money through various deceptive tactics, and ones that cheat the government out of money with erroneous tax claims.

Here is the list:

1. Phishing. This is when fake emails sent by scammers posing as banks or companies are used to steal money from bank accounts and credit cards.

2. Fake Economic Stimulus rebates. Con artists are tricking individuals into revealing personal financial information online through email or through a phone call by posing as an IRS agent. (The stimulus is automatic, there is no reason for the IRS to call or email you.)

3. Frivolous Arguments. These are myths about tax laws including erroneous ideas like “filing tax is optional,” or “tips don’t count as income.” A complete list of these false arguments is available on taxes.banks.com.

4. Fuel Tax Credit Scams. Individuals who are not entitled to the fuel tax credit have tried to claim it.
5. Hiding Income Offshore. It is illegal to try to avoid paying taxes by keeping money in another country.

6. Abusive Retirement Plans. The IRS is cracking down on individuals who try to deposit more than the allowed annual contribution to avoid taxes.

7. Zero Wages. Phony wage reports that reduce the amount of tax owed using falsified W-2 and 1099 forms.

8. False Claims and for Refund and Abatement. Requests for tax abatements using Form 843, even though no taxes were previously paid.

9. Tax Preparation Fraud. Individuals pose as tax professionals and promise huge returns. They encourage false claims, and often take substantial portions of promised returns.

10. Disguised Corporate Ownership. Hiding business ownership and concealing or underreporting income (money laundering) is a serious offense. Terrorist funding is sometimes accomplished in this manner.

11. Misuse of Trusts. Some promise that taxes will be lower if funds and assets are transferred into a trust, yet not all trusts offer tax benefits.

12. Abuse of Charitable Organizations and Deductions. This is the misuse of tax-exempt organizations, donors controlling the use of contributions, and private tuition payments disguised as donations for tax benefit.