6. Inflated Refunds – Anyone who promises you a big refund without looking at your records first should be avoided. If it sounds too good to be true, guess what? It is.
7. Fake Charities – Before making your donation, check the IRS website to make sure that your donation is going to a qualified charitable organization. Look for knockoff organizations with names, websites, and logos that are similar to well-known legitimate organizations.
8. Padded Deductions/Credits – It's really simple — do not claim larger deductions than you can justify through receipts or other paperwork. Similarly, make sure you meet eligibility requirements for any tax credits before attempting to claim them.
9. Excessive Business Credit Claims – The above advice goes for businesses as well. Do not claim credits like the research or fuel tax credit unless your business meets the qualifications for those credits.
10. Falsifying Income for Credits – Scam artists can suggest bending the income rules to qualify for tax credits that target lower-income taxpayers, such as the Earned Income Tax Credit. Do not give in to their claims. Never falsify income on a tax return for any reason, regardless of what anybody tells you.
11. Abusive Tax Shelters – By using complicated but authoritative-sounding language, tax scammers can fool people into thinking tax shelters are legitimate when they are not. Seek independent confirmation and outside advice on any scheme designed to limit or avoid taxes.
12. Frivolous Arguments – The IRS is too busy to waste time listening to your claims of being a sovereign nation and therefore enjoying immunity from taxes, or any similar outlandish claims on tax returns. Frivolous tax returns incur a $5,000 penalty, and failure to file penalties can end up being even worse.
Look out for these and other tax scams as you file your taxes this year. Healthy skepticism, relentless guarding of your personal information, and adherence to the rules can save you a lot of trouble as well as money.