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Tax Defense Network Scam Report Part II: Tax Preparer Fraud

November 29, 2011

IRS efforts to curb tax scam abuses have become fiercer in recent years. Tax preparer scam companies were quietly watched as the IRS amassed details on their misdeeds. Now Tax Defense Network is here to report the very latest information to protect taxpayers from falling for scam artists posing as legitimate tax preparers. Tax Defense Network is proud of our industry, and we believe the majority of tax preparers are honest and professional. Yet, some scam programs cross the line into fraud. Be warned, you may be subject to criminal penalties if the scam is flagrant enough.

False or Misleading Forms Scam

Tax Defense Network’s tax scam research found bogus usage of IRS forms. Scam artists were attempting to file false or misleading tax forms to knowingly obtain tax refunds that were not due to them. Take Form 1099, Original Issue Discount (OID) Scam, as an example. In this scam, the form was fraudulently used to support a claim for withholding credits that were never paid. Do not participate in any tax scam that advises you to claim credits or deductions you know you are not entitled to.

All in the Family Scam

Family and friends have been misled to file false tax returns, due to fraudulently shifting actual data, within their family. It is illegal to allow a relative to use your information on their tax return. Child trading is a similar tax filing scam where family members claim the same child on multiple tax returns. A variation of this scam only claims the child once, but family members take turns with who makes the claim to scam the total amount of taxes paid. This sort of tax filing can lead to serious fines or even criminal prosecution.

Tax Preparer Scam

Tax fraud against the IRS wouldn’t make sense for the scam preparer unless they stood to gain from their illegal activities. Some were caught bleeding the taxpayer’s refund similar to an embezzlement scam. Other scam companies were caught charging inflated fees for tax preparation services. And the age-old false promises scam was still being used to attract naïve clients. Tax Defense Network advises all taxpayers to investigate your potential tax preparer before engaging their services.

Tax Defense Network: a Trustworthy Advisor

Hundreds of injunctions have come down from Federal courts ordering individuals to stop preparing tax returns. The IRS takes tax filing scam artists seriously, and moves aggressively to stop tax abuse. Statistics indicate that the vast majority of tax refund scam artists are caught. Do not be caught in their scam. Examine the tax company you plan to work with. Tax Defense Network has been in business for 15 years, providing reliable tax relief services to the American taxpayer. Honest advice and pricing have earned Tax Defense Network an A rating with the Better Business Bureau. Contact Tax Defense Network today for tax relief advice you can trust.

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