2015 Tax Fraud Facts & Myths

This tax season, there are plenty of concerns for you and millions of other taxpayers. Did you get all of your employee tax forms? Did you have additional income in 2014 that bumped you into a higher tax bracket? How will you include your health care coverage on your return? Uncertainties begin stacking up quickly. But what about tax fraud? If you don't considered this question early on, you may be overlooking a potential time bomb.

Tax fraud is a very real and devastating problem for thousands of taxpayers and the government, which has paid out millions of dollars for counterfeit tax claims. What can you do to keep from becoming a victim? Like any other plan of action, you have to know the facts before you can truly be prepared. Here are some common facts and myths about tax fraud to keep in mind as you prepare your annual return.

FACT: Tax Scammers May Reach Out to You by Phone or Email

What is significant about this fact is that the IRS initially makes contact with taxpayers by mail, not by phone or through email. If you receive a call from anyone claiming to be from the IRS, asking you for money, hang up. Do not answer his or her questions. If the IRS wants to reach you about an issue with your return or a tax debt, you'll receive an official notice in the mail.

FACT: Scammers May Possess an Alarming Amount of Your Information

A fraudulent caller may attempt to keep you on the line by offering a piece of critical information, such as the last four numbers of your Social Security, or even by confirming the actual amount of your tax debt. Don't be fooled. Understand that a proficient fraudster is resourceful, even going so far as to scavenge your garbage for useful data (don't forget to shred your documents!). When in doubt, remember that the IRS won't contact you by phone.

MYTH: You're Going to Jail Today for Your Tax Debt

Many taxpayers bristle at the mere mention of the IRS, even if they have no legitimate reason to be concerned. Fraudsters will use this prejudice against you in an effort to get you to act. You may be advised that you will be arrested within the hour, or by the end of the day, if you don't send a payment immediately. Also you may be instructed to make a payment using a specific method, such as a money wire or debit card payment. Remember, if you're facing legal action from the IRS, you'll be well informed and likely will already have gone to court. The IRS will not demand a payment over the phone, and won't imprison you if you don't comply.

FACT: Scammers Will File Fraudulent Returns on Your Behalf

Some of the more ambitious criminals out there will actually obtain the necessary information to file a fraudulent return on your behalf. They will provide fictitious income information to generate a refund and are likely to avoid detection by the IRS. The problem is typically caught when you go to file your refund and the IRS informs you that it's already been processed. The best defense you have here is to file as early as possible, to prevent scammers from beating you to the punch.

MYTH: You Have No Recourse If You Encounter a Tax Scam

The IRS and the Tax Inspector General encourage any tax scam victim to call 1.800.366.4484 and report the issue. If you need the resources of a licensed tax professional to straighten out any issues resulting from a tax problem, make sure to do your research beforehand. Look for companies with experience with your type of tax issue, as well as accreditation from a source such as the Better Business Bureau. Your best course of action is to be prepared for anything, but if you run into problem you can't handle on your own, a licensed tax professional is a good friend to have.

Talk to a Tax Attorney

Need a lawyer? Start here.

How it Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you
Get Professional Help

Talk to a Tax attorney.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you