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What Are the Latest Tax Scam Targets?
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With a record number of Americans expected to file their IRS
returns online this year, authorities expect to see a
corresponding rise in Internet- and email-based tax scam
tricks.

There's new concern too that the rise in the number of
home-based businesses could spark a bout of phony tax schemes
that fool people into making expense claims they're not
entitled to.

And for those who prefer a non-technical, offline approach,
the IRS continues to warn taxpayers of the need for caution
when selecting a tax preparer. We have 7 tips to help you make
a wise decision.

But first, those online tax scams...


Bogus Websites and Emails

By one estimate, at least 5,000 phony websites, hosted in more
than 50 countries, will be online this year, claiming to be
part of or linked to the IRS.

Victims usually arrive there by clicking a link in an email,
which, again, seems to come from the IRS or an associated
group such as the Free File Alliance (a legitimate
organization) or the IRS Antifraud Commission (a non-existent
body).

Under the guise of the Free File Alliance, a real organization
comprising tax software companies and the IRS, a bogus message
directs users to file tax returns electronically via the site.

The crooks do actually file the form -- but not before
altering the bank account details, so they get the refunds!

In the case of the Antifraud Commission, the bogus message
claims that someone has registered the recipient's credit card
with the Electronic Federal Tax Payment System (EFTPS) and
that the card is being used to make payments.

Following a link in the email takes victims to a phony web
page where they are asked to provide their card details,
Social Security number and other personal information.

This identity theft / phishing ruse is a common approach in
most of the online tax scams.

Other recent examples of IRS scams include messages that tell
victims they have to complete an online updated version of
their W-2 forms.

Action: The IRS never, but never, initiates correspondence
with taxpayers by email and they never ask for your SSN or
other financial details because they already have them on your
form or on file.

If you're filing directly, rather than through tax software,
the only free file site is via irs.gov -- and note that a tax
site without that .gov extension is NOT the IRS.

http://clicks.aweber.com/y/ct/?l=76C...ru9ntLjYWMIZyg

And when it's all done, any email that tells you there's money
waiting for you is an out and out tax refund scam, nothing
less.

For more information on online tax scam tricks, check out the
following Scambusters issue.

http://clicks.aweber.com/y/ct/?l=76C...Vj5TTzk1_M7Alw


The Home-based Business Tax Scam

The huge shift towards home-working, whether through
"telecommuting" as part of a regular job, or by setting up
and running a home-based business, provides tax scam artists
with another route to get at your pocket.

In this case, the crooks promote schemes via both websites and
email. Their message is usually that they can help you claim
or write off large chunks of your personal and living costs as
legitimate business expenses.

In some cases, these IRS scam tricksters sell kits that are
supposed to point you towards these expense claims; in other
cases, they simply suggest you inflate business expenses.

In yet other instances, tax preparers have been known to
suggest clients simply invent a non-existent home business as
a source for deduction.

Action: With the growth in this type of work, the IRS is
casting a closer eye than ever on home business expenses.
Their guidelines: expense claims must be "ordinary and
necessary" in relation to legitimate business activity.

Tax software can often guide you through this but the bottom
line is that if you're not sure about what you can claim,
contact your tax preparer, and if that's not possible, the
IRS. And if you're not in business, don't pretend you are!


Selecting Your Tax Preparer

Using a qualified, reputable tax preparer is often the least
painful route to paying the least amount of taxes. On the
other hand, using a bad one can cost you a lot of money and
could even put in you in jail, since you are ultimately
responsible for the information that goes on your tax form.

We covered this subject in the Scambusters issue above. You
will also find more useful information in last year's
Scambusters special on the IRS "Dirty Dozen" tax scams and tax
relief scams.

http://clicks.aweber.com/y/ct/?l=76C...hUACn18yWkzSiA

Meanwhile, here are 7 simple tips that will help you find and
work successfully with a reputable tax preparer:

1. Check if they're "enrolled" tax preparers (which means they
have taken an IRS exam) and/or qualified CPAs. Over the next
three years, every tax preparer will have to be registered
with the IRS, but not right now. So, find out just how
qualified your preparer is.

2. Check out their credentials too with state licensing bodies
(a few states, such as California and Oregon, actually have
specific regulations for tax preparers). And ask them for
verifiable references.

3. Establish who is actually going to do the work -- the
preparer or an assistant down the line? Unqualified preparers
often miss key deductions.

4. Ask if they would represent you in the event of an audit or
other review. This may turn out to be important -- and will
also give you an idea about how reputable and confident they
are in their own abilities.

5. Get an upfront quotation on their fees. Usually they charge
by the hour -- and also find out how many hours they expect to
spend. Don't work with a preparer who offers to work for a
percentage of your refund.

6. Monitor how much detail they ask for. If they don't want to
see receipts or scrutinize income and expenditure, they're not
doing their job.

7. Beware of scaremongers -- preparers who try to persuade you
it's unsafe to take legitimate deductions -- and very
aggressive preparers. You likely want a tax preparer who will
take all the legitimate deductions available, but no more.

And remember, as we said above, you are ultimately responsible
for what goes on your tax form. So check every line before you
sign off on it.

That's a wrap. Good luck with your 2009 tax preparations,
follow our simple guidance, check out the irs.gov site -- and
stay tax scam free!