HONOLULU (HawaiiNewsNow) - The IRS recently released the "2011 Dirty Dozen Tax Scams," which represent the worst of the worst tax scams. These scams may seem tempting to people, but those who fall prey to them, end up getting hurt.
Some examples include the Hiding Income Offshore scam, where taxpayers will evade taxes by using offshore debit cards, credit cards, wire transfers and foreign trusts. The IRS aggressively pursues taxpayers as well as preparers who facilitate these types of schemes.
Identity theft and IRS impersonation schemes tend to flourish during the tax season. With identify theft, a fraudster with someone else's identity can file a fraudulent tax return and collect a refund. Fraudsters will use phishing, the use of phony email or websites, to trick people into revealing personal or financial information online.
A fraudster may send an email claiming to be from the IRS, notifying you of the $1,000 refund that you're eligible for. In order to receive the refund, the email will instruct you to click on the link or attachment. The link or attachment will more than likely contain malicious software. If you receive an email from someone claiming to be from the IRS, forward the email HERE.
While most tax preparers are professional and provide honest service, some make basic errors or engage in fraud or other illegal activities - such as skimming a portion of the client's refund or charging more than they should. To increase taxpayers' confidence in the tax system, the IRS is implementing a number of requirements for paid tax preparers.
All suspected tax fraud should be reported to the IRS. For additional information on tax scams and how to prevent them, visit the IRS.
Bank of Hawaii will also be offering free seminars to the public on fraud prevention for businesses and individuals starting in March. For more information on these seminars, visit Bank of Hawaii Smart Money Seminars.
Reminder: the federal filing deadline is April 17 and the state deadline is April 20.
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