How to Protect Yourself
In a recent announcement, the IRS has raised alarms about an increase in tax scams related to COVID-19 relief funds. With new reports surfacing, a dedicated team of auditors is set to tackle these fraudulent activities, emphasizing the importance of vigilance among individual taxpayers.
The Rise of COVID-19 Relief Scams
The COVID-19 pandemic brought about unprecedented economic relief measures to help individuals and businesses stay afloat. However, with these measures came a surge in fraudulent activities. Scammers have found ways to exploit the vulnerabilities of taxpayers, leading to significant financial losses and legal complications.
The IRS has noted an uptick in fraudulent claims involving COVID-19 relief funds. These scams often involve taxpayers amending their tax returns with the promise of receiving $10,000, $15,000, or even $20,000 in refunds. Scammers charge victims $1,500 to file these returns, falsely stating that they qualify for these refunds.
The problem arises when the IRS audits these returns. Firstly, the IRS is not obligated to process an amended return, meaning they are not required to issue these tax refunds. Secondly, the IRS has the right to audit amended returns and ask for proof, leaving the taxpayer out of the initial fee paid to the scammers and with their bank statements and other personal information compromised. Even if a taxpayer receives a refund based on one of these fraudulent filings, the IRS has three years to audit the amended return, potentially resulting in a wide range of legal and financial repercussions — and further complicating their tax situation.
Fuel Tax Credit Scams: A Growing Concern
In addition to COVID-19 relief scams, the IRS has also issued warnings about fraudulent claims related to the fuel tax credit. This credit is strictly for specific uses, including airplanes, farm equipment, and construction machinery, rather than applying to personal liability. However, scammers are misleading taxpayers into believing they qualify for this credit, resulting in erroneous claims and potential legal repercussions.
Beware of Fake Schedule H Amended Returns
Another scam that the IRS has alerted taxpayers to is the growing issue of fraudulent Schedule H amended returns. Schedule H is used by taxpayers who employ household workers, such as nannies or caregivers, to report household employment taxes. Scammers are now targeting unsuspecting taxpayers by filing fake amended returns to claim refunds for taxes that were never paid or owed.
Protect Yourself from Scams
- Stay Informed: Always stay updated with the latest information from the IRS. Visit the official IRS website for accurate and timely information on tax credits and relief measures.
- Verify Communications: Be cautious of unsolicited emails, texts, or phone calls claiming to be from the IRS. The IRS will never initiate contact with taxpayers through these means to request personal or financial information.
- Consult a Professional: When in doubt, consult with a trusted tax professional. At LBS Tax, we specialize in helping taxpayers navigate the complexities of tax regulations and ensure compliance.
- Report Suspicious Activity: If you suspect you have been targeted by a scam, report it to the IRS immediately. Use the IRS Impersonation Scam Reporting webpage to file a report.
We’re Here to Help
At LBS Tax, we understand the stress and confusion that can arise from dealing with tax issues, especially when scams are on the rise. Our team of experienced professionals is dedicated to helping you avoid pitfalls and resolve any tax-related challenges. Whether you need assistance with understanding tax credits, building a payment plan for tax debt relief, or ensuring your filings are accurate and compliant, we are here to support you every step of the way to your tax solutions.
Don’t let scammers take advantage of you. Stay vigilant, stay informed, and let the experienced team from LBS Tax be your trusted partner in navigating the complexities of tax regulations. Contact us today for a consultation and take control of your financial situation.
By spreading awareness and taking proactive steps, we can protect ourselves and our community from falling victim to these harmful scams. Remember, LBS Tax Services is here to help you make informed decisions to stay safe and compliant.