Money Talks News: Tax scams to avoid

Money Talks News - Most individuals are currently focused on tax season and getting their return prepared on time. However, there are also tax-related scams you should be watching out for.

Every year, Postal Inspector Blanca Alvarez says she investigates crimes using the mail, including identity theft and tax fraud.

"The identity is stolen and then they use the mail to either receive fraudulently obtained credit cards or tax refunds," Alvarez explained. "People find out that they're victims of tax fraud usually when they go to file their taxes and it gets rejected."

Alvarez also provided advice on keeping consumers safe.

"Check their credit on a regular basis, at least once a year, and pick up their mail from their mailboxes soon after delivery to make sure that they're getting all of their mail," Alvarez said.

For years, identity theft was at the top of the IRS "Dirty Dozen" tax scam list. In more recent years, though, it has been phone scams involving people pretending to be IRS agents and trying to get your money.

There are other popular scams to watch out for as well.

First, phishing. Crooks send a fake IRS email trying to get your information. You should not respond, as the IRS does not send emails at all, much less ones asking for personal information.

Then there is tax preparer fraud.

Beware of accountants bearing gifts of big refunds, if they are using inflated numbers or fake information to get them. Remember, you are the one signing your return, and you are the one ultimately responsible.

Also, false filing. Claiming deductions or credits you are not entitled to is fraud. It can land you in hot water, or in the extreme, even jail.

Making mistakes with retirement plan contributions is another common tax scam. Sometimes preparers do it, sometimes filers do it. Either way, the IRS is looking for it.

Finally, every year you will hear someone say income taxes are unconstitutional, so you do not have to pay them. However, that is largely incorrect.

Tom Sawyer of Sawyer & Latimer, P.A. explains why you must pay your income taxes.

"You may not believe that it's constitutional, but that doesn't mean they won't come and take all of your stuff," Sawyer explained.

Bottom line? You can protect yourself from fraud, all you need is the right information.

It's waiting for you at the Money Talks News website. Just do a search for "Tax Hacks 2018."

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