Tax Fraud Alerts

The Internal Revenue Service (IRS) wants to ensure that you are aware of various schemes, scams, and cons that could potentially defraud you. It is important to be cautious and not fall victim to any scheme that promises instant wealth or exemption from your tax obligations as a United States citizen. Remember the saying, "If it sounds too good to be true, it probably is!" Some of these schemes can lead to the loss of your life savings, while others can result in prosecution and imprisonment if you knowingly participate in them.

Abusive Return Preparer

When choosing a tax preparer, it is crucial to exercise caution. While most tax preparers provide excellent service, there are a few unscrupulous individuals who file false and fraudulent tax returns, ultimately defrauding their clients. It is important to note that even if someone else prepares your tax return, you are ultimately responsible for all the information on the return. Therefore, it is essential to choose a reputable and trustworthy tax preparer.

Abusive Tax Schemes

Abusive tax schemes initially took the form of fraudulent domestic and foreign trust arrangements. However, these schemes have evolved into sophisticated arrangements that give the appearance of taxpayers not being in control of their money. In reality, taxpayers receive their funds through debit/credit cards or fictitious loans. These schemes often involve offshore banking and the establishment of scam corporations or entities. It is important to be aware of these schemes and avoid getting involved in them.

Nonfiler Enforcement

There are individuals who argue that paying taxes is voluntary or illegal for various reasons. However, the courts have consistently rejected these arguments as frivolous and impose financial penalties for raising such arguments. It is crucial to understand that taxes are mandatory, and failing to file tax returns or pay taxes can have serious consequences. Take the time to learn the truth about frivolous tax arguments and ensure compliance with tax laws.

Tax Scams — How to Report Them

To help the public recognize and avoid abusive tax schemes, the IRS provides an abundance of educational materials. Participating in an illegal scheme to avoid paying taxes can lead to imprisonment, fines, and the repayment of taxes owed with penalties and interest. Education is the best way to protect yourself from falling into the traps of these "too good to be true" tax scams. The IRS encourages individuals to report suspected tax fraud activity to help combat these scams and protect taxpayers.

If you suspect any tax fraud activity, you can report it to the IRS. Reporting such activity is crucial in preventing others from falling victim to these scams. By reporting tax fraud, you contribute to the efforts of the IRS in identifying and prosecuting individuals involved in fraudulent tax schemes.

Remember, staying informed and educated is the best defense against tax fraud. Be vigilant, choose your tax preparer wisely, and report any suspicious activity to the IRS.