irs, attorney general warn of top 10 scams in tennessee

Scam artists this year may try to take advantage of people receiving checks under the economic stimulus program recently approved by Congress.

"Tennesseans must remain alert and informed about scams around tax time. This year's stimulus check program could pose opportunities for criminals to defraud taxpayers and steal their identities," said Tennessee Attorney General Bob Cooper. "Tennesseans are urged to remain vigilant about the stimulus check program as well as other tax scams via the irs.gov website."

According to IRS spokesman Dan Boone, the IRS updates the “Dirty Dozen” tax scams on IRS.gov each year detailing the latest schemes.

“Crooks have learned that using the name of the IRS commands attention,” Boone said. “Once they have your attention, their goal is to steal your personal information and your money.”

Cooper and Boone both advised remembering the old saying, “If it sounds too good to be true, it probably is.”  They warned Tennesseans to be on the lookout for these scams:

1.  "IRS" Requests for Personal Information: The IRS never uses e-mail to contact you about your taxes and rarely will ask for private information over the phone. Guard your social security number and bank account information closely. For more information about how to protect your social security number, go to the Federal Trade Commission’s Web site. To confirm an IRS contact, call 1-800-829-1040.

2. Fake Websites and Forms: The IRS logo can be easily copied, and scam artists can make e-mails look official. Tech-savvy con artists can even set up links to direct consumers to what appears to be an official website or government form. Do not click on any internal links you receive in an e-mail. If you need to contact the IRS, go to the official website or type in the address www.irs.gov.

3. "Eligible for...: With reports of stimulus check scams already surfacing, claims appearing to be from the "IRS" that contain such words as "opportunity" or "penalty" are typically scams. You cannot get your stimulus check sooner...even for a fee...than the government issues the checks, beginning in May 2008. Also, be advised, the IRS does not force taxpayers to use direct deposit nor does the IRS threaten taxpayers with penalties by e-mail for failing to do so.

4. Fake Checks: Do not get fooled by fake checks. If you have any doubt you are cashing a legitimate IRS-issued check, take the check to your bank teller to have it verified rather than depositing it through an ATM. You are responsible for any money spent on a cashed counterfeit check of any kind.

5. Mail Theft: If you did not choose to have your refund direct deposited and expect to receive a physical check, be sure to check your mailbox regularly. Do not allow your mail to sit in the box for potential thieves.

6. Return Preparer Fraud: Dishonest tax preparers attract clients by promising large refunds. Walk away if they suggest that you borrow dependents, claim false tax deductions, or put anything you know is incorrect on your tax return. You are responsible for the accuracy of your tax return!

7. Trust Misuse: Unscrupulous promoters urge taxpayers to transfer assets into trusts with false promises of reduced taxes and deductions for personal expenses. Seek the advice of a trusted professional before entering into a trust.

8.  Frivolous Arguments: Promoters make outlandish claims about people being able to legally quit filing and paying taxes. Not true! Read “The Truth About Frivolous Arguments” at www.irs.gov. 

9. False Refund Claims: You may even hear about this scam from a friend or relative who is convinced that it’s real.  Promoters may tell you to claim a refund based on telephone excise taxes or Social Security benefits. The phone tax refund may be legitimate but not if you already claimed it last year and usually not for a large amount. And Social Security benefits generally are not reported as taxable income and do not generate a tax refund.

10. Disguised Corporate Ownership: Domestic shell corporations and other entities are being formed and operated in certain states for the purpose of disguising the ownership of the business or financial activity. Once formed, these anonymous entities can be, and are being, used to facilitate underreporting of income, non-filing of tax returns, listed transactions, money laundering, financial crimes and possibly terrorist financing. The IRS is working with state authorities to identify these entities and to bring their owners into compliance.

Report suspected tax fraud to the IRS using Form 3949-A, Information Referral, available at IRS.gov or by calling 1-800-829-3676. See the rest of the Dirty Dozen tax scams at www.irs.gov.