Tax Scams You Should Be Aware Of
September 18, 2023
These Tax Scams Could Get You in Trouble with the IRS
Tax filing season is a source of stress for just about everyone. That extra stress and uncertainty ramps up and up, and you never know if you must write a check to the IRS.
You also do not know which threats will loom, and that lack of knowledge could put you at real risk. Tax scams have increased in recent years, but they tend to break down into four major categories. One of these tax scams can put you in real danger and can leave you on the hook with the IRS, owing thousands of dollars if you’re unlucky. Here are four tax scam dangers you should be aware of.
Important Note: If you’ve fallen victim to a tax scam and the IRS is claiming you owe $10,000 or more, contact our firm
today for a consultation.
#1. IRS Impersonators
When tax season begins, fake IRS agents come out of the woodwork. Those phony IRS impersonators may flood your email inbox with threatening messages and text your smartphone with incorrect information.
Those IRS impersonators may call you on your landline or smartphone, ratcheting up the threats and the danger. From threatening arrest if back taxes are not paid to using hard sell tactics to get you to pay up, those impersonators can take a big bite out of your wallet.
If you want to stay safe, know that the real IRS never initiates communication via email, text, or phone calls. If there is a problem with your taxes, the IRS will send a good old-fashioned letter, so watch your mailbox and ignore everything else.
#2. Phishing Scams
Phishing scams are always going on, but they really ramp up as tax season gets underway. Those cybercriminals know that tax season is a stressful time for their victims, and that they may put their guard down if confronted with a sufficiently scary subject line.
It is always a good idea to treat unsolicited emails with a healthy dose of skepticism, but that's even more true when tax season is on the horizon. You should always investigate such messages thoroughly -- and never click on embedded links that could harbor malware and other threats.
#3. Fraudulent Filing
If you do not file your taxes quickly, cybercriminals may do it for you. Fraudulent filing has increased, upping the risk that you could be the next victim.
These fraudulent filers use Social Security numbers and other personal information they buy on the dark web. Armed with that information, they file fraudulent tax returns, claiming refunds they are not entitled to and funneling them to their own accounts instead of yours. The best way to guard against this risk is to file your tax return as quickly as possible and protect your personal information online.
#4. Shady Tax Preparers
Sometimes the people you pay to prepare your taxes are the source of the scam. Shady unlicensed tax preparers mine information from their clients, keeping lists of Social Security numbers and other key information to perpetrate future crimes.
If you trust your taxes to a preparer who is less than honest, identity theft may not be your only problem. Those shady tax preparers may also commit fraud, making up deductions, claiming phony dependents, and ultimately getting you a huge tax refund, you do not really qualify for. When the IRS catches the mistake, the tax preparer will be long gone, leaving you on the hook for penalties, interests, and the kind of stress only an IRS audit can provide.
Filing taxes is stressful enough, but falling for a scam could make your interactions with the IRS even worse. Cybercriminals see tax filing season as a golden opportunity, once they are ready, willing, and eager to exploit for their nefarious purposes.
If you want to protect yourself and your money, you must take a proactive approach to cybersecurity. Knowing the dangers is a vital first step, so always keep a close watch on your information.
If you're facing tax troubles, reach out to our tax resolution firm, and we will schedule a free and confidential consultation to explain your options thoroughly and help you permanently resolve your tax problem.
The IRS in December sent a total of $2.4 billion in "special payments" to roughly 1 million Americans, part of an effort to ensure that people who didn't receive all of their federal stimulus checks during the pandemic would finally get the money. Most eligible taxpayers have already received their Recovery Rebate Credit, as the payment is called, but for those who haven't there is still time to submit a claim. But time is running out, as the deadline to file a claim is April 15. Here's what to know. What to know about the $1,400 IRS stimulus checks The Recovery Rebate Credit was designed for people who didn't get all or some of the stimulus checks when they were issued during the pandemic. Lawmakers authorized three stimulus payments, with two sent in 2020 and a third in 2021. The checks are a holdover from the three stimulus payments that were sent during the pandemic, as some people may not have received some of the money, even if they were eligible. The tax agency disbursed the funds after reviewing internal data that showed many people had filed tax returns but yet didn't claim what is known as the "recovery rebate credit" in 2021. However, non-filers, or those who have not filed Payment amounts will vary by person, with a maximum amount of $1,400 per recipient, the agency said in a statement. Who will get a payment from the IRS? Most taxpayers who were eligible for the stimulus payments have already received them directly, or later through the recovery rebate credit, the IRS said. However, the encourages non-filers to claim credits before the approaching April 15 deadline, as they may be eligible for the the up to $1,400 payment. Who is not eligible for a payment from the IRS? The eligibility requirements to file a claim to the 2021 Recovery Rebate Credit are as follows: -You are a legal U.S. resident. -Either you or someone you claim as a dependent has a valid Social Security Number or Adoption Taxpayer Identification Number issued by the IRS. -You cannot be claimed as a dependent on another taxpayer's 2021 tax return. -See here for more information on eligibility. Do you need to apply for the IRS payment? For those who have not yet received a payment, the answer is yes. While most eligible taxpayers have already received the funds through automatic payments, eligible non-filers will have to file a claim in order to get their payment. In order to claim the 2021 Recovery Rebate Credit, taxpayers must file a 2021 tax return by the April 15, 2025, deadline, "even if their income from a job, business or other source was minimal or non-existent," according to the IRS' website. Detailed information on how to file a claim for the 2021 credit can be found here. When will the IRS send the payments? The tax agency said the checks will be sent in December, with most of the payments arriving by late January 2025. The money will either be automatically direct deposited to the recipient's bank account or will arrive in the mail via a paper check. Contact us today for all your IRS needs! {{content_library.global.phone.148012611}}
Tax season started in late January, but the IRS’s latest statistics show that many Americans are still waiting to file their taxes. As of February 7, 7.7% fewer tax returns have been received by the agency compared to a similar time frame last year, according to its latest data release. While the IRS expects filing numbers to even out, the IRS.gov website has experienced a 40% decline in visits this year to date over last year. Francine Lipman, CPA, a tax law professor at the University of Nevada, Las Vegas, says the reasons could be endless but probably come down to simple procrastination. “Despite all the Super Bowl ads, I don’t believe that tax issues are on people’s radar yet,” adds Lipman. This is surprising considering the political climate, says Jordan Rippy, an accounting professor at Johns Hopkins University’s Carey Business School, who expected to see an uptick in returns filed this year. “Given the general climate surrounding the new administration, I would have expected more anxiety in the general population and a desire to receive refunds more quickly,” she tells Fortune. Elon Musk’s Department of Government Efficiency (DOGE) reportedly visited the IRS on Thursday to begin analyzing the agency’s operations. Senator Ron Wyden (D-OR), ranking member of the Senate Finance Committee, later posted on X that “if your refund is delayed, they could very well be the reason.” Average tax refunds are higher this year so far The rise in electronic filing is one of the biggest changes to the tax system in the last decade. With over 90% of individual taxpayers now filing their returns online, the process has become easier to handle for many Americans. But taxpayers still miss out on over $7 billion in underclaimed and unclaimed tax credits and deductions each year. In the 2025 tax season to date, tax filers have received a 18.6% increase in their average refund amount ($2,065) compared to this time last year ($1,741). The IRS cautions this isn’t a perfect indicator of the final trend in tax refunds, since it’s early in the season. The agency says most refunds are issued within 21 days. In the final analysis, the average refund last year was around $3,138. Compared to 10 years prior, last year’s average rebate was down nearly 30% on an inflation-adjusted basis. Rippy says she is surprised that average tax refunds have not decreased more as Americans realize they can adjust their withholdings and get more money per paycheck throughout the year. “If you receive a large tax refund, what you've essentially done is given a loan to the government over the last year that you didn't have to give them, and you've done that interest-free,” says Rippy. At the same time, she admits that the fact that many Americans expect a big refund year after year is a good thing, as it’s a form of forced savings. While many end up saving their refund, others use it to pay down debt, make a home improvement, or go on vacation.
If you’re dealing with IRS wage garnishment, it can feel like you're trapped in a difficult situation. The IRS can take a portion of your paycheck to satisfy your tax debt, causing serious financial strain. However, you do not have to face this alone. There are steps you can take to stop garnishment and restore control over your finances. This guide will help you understand what wage garnishment is, why it happens, and what actions you can take to end it. Understanding IRS Wage Garnishment Wage garnishment is a legal tool used by the IRS to collect unpaid taxes. Unlike many other types of debt collection, the IRS does not need a court order to garnish your wages. They will send you a Final Notice of Intent to Levy before initiating garnishment, and if you don't act, they will take a portion of your paycheck to pay off your tax debt. How Wage Garnishment Affects You Wage garnishment can create numerous challenges, including: - Loss of Income: With part of your wages withheld, it can be difficult to meet daily living expenses. - Damage to Your Credit: Unresolved tax debts and garnishments can hurt your credit rating, making it difficult to obtain loans or secure favorable financing terms in the future. - Stress and Emotional Toll: The financial pressure can create stress, affecting your mental health and relationships. Professional Impact: If colleagues find out about the garnishment, it could affect your reputation at work. Steps to Take to Stop IRS Wage Garnishment If you’re facing wage garnishment, take action quickly to put an end to it: 1. Respond to IRS Notices Immediately If you receive any IRS notice about garnishment, it's vital to act quickly. Ignoring it will only escalate the situation. Contact the IRS and request a Collection Due Process hearing where you can address the garnishment. 2. Explore Payment Plans and Agreements The IRS offers various options to settle your debt, such as installment agreements or an Offer in Compromise (OIC). These options allow you to repay your debt over time or settle it for less than what you owe. 3. Apply for Hardship Relief If the garnishment is putting you in financial distress, you may qualify for a hardship exemption, which can temporarily stop the garnishment while you work out a solution. 4. Contest the Tax Debt If you believe the IRS has made a mistake in assessing your tax debt, you have the right to dispute it. During this dispute process, garnishment can be put on hold until the matter is resolved. 5. Seek Professional Help Dealing with the IRS alone can be overwhelming. A skilled tax professional can help you navigate the complex process, negotiate with the IRS, and secure the best possible resolution for your situation. Why You Should Work with Advantage Tax Relief The process of stopping IRS wage garnishment requires specialized knowledge and experience. Advantage Tax Relief, located in Itasca, IL, offers over a decade of experience in tax resolution. Their team of experts knows how to work with the IRS to resolve wage garnishment issues and put together a personalized plan for you. Working with Advantage Tax Relief means having a dedicated partner who understands the nuances of IRS procedures and will advocate on your behalf to reach a favorable resolution. Their team will help you explore all options, including negotiating payment plans, filing for hardship relief, or contesting tax assessments. Take Action Today Don’t let wage garnishment control your life. Contact Advantage Tax Relief in Itasca, IL at 630-773-3200 for a consultation. Their team is ready to guide you through this process, offering the help you need to regain control of your finances and find relief from the IRS.
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