US Taxpayers: Beware of these FATCA and Tax Scammers

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Tax scams have likely been around for as long as taxes have been collected. In light of the significant penalties, fines, prison sentences and other consequences that can be imposed for tax non-compliance issues, taxpayers have good reason to be apprehensive or nervous if they are contacted by someone claiming to represent the Internal Revenue Service (IRS). Thus, if you are contacted by an IRS agent, it is always prudent to verify their identity, the fact that they are employed by IRS, and request a callback number at the IRS where the agent can be reached. Furthermore, if you are contacted by an individual claiming to represent the IRS or the US government, an experienced tax professional can often more readily recognize the signs of a tax scam.

At the Brager Tax Law Group we recognize that well-meaning taxpayers can face serious consequences if they are taken in by a tax scam. This post will identify and discuss a number of the more common tax scams and their consequences as identified by the IRS.

Tax preparer fraud can result in new tax problems

When selecting a tax professional, it is important that you work with an individual who is established, reputable and honest. While the IRS has taken measures to close down registered tax return preparers, others still exist. In many cases the hook utilized by a tax preparer is that they promise large, sometimes outlandish, refunds. Once ensnared, the dishonest preparer may unlawfully retain a portion of the tax refund without the individual’s knowledge or consent, misdirect funds that were intended to cover a tax obligation, or request excessive fees after obtaining your financial information.

The IRS now requires all for-profit tax preparers to obtain a preparer tax identification number (PTIN) which can be used as one aspect of your inquiry into the legitimacy of a tax preparer. However, you are ultimately responsible for the information contained within your tax returns. If you believe you have fallen victim to a tax scam, hiring an attorney to resolve your emerging problems and to protect you from allegations that may be levied by the IRS can result in a more favorable resolution.

An unanticipated phone call from someone claiming to represent the IRS may indicate fraud

If you receive a call from someone demanding a tax payment or requesting an urgent return call without first receiving written notice from the IRS, the caller is likely perpetrating a scam. These schemes can be sophisticated. They may spoof a caller ID to appear as if they are calling from the IRS. They may also know at least some information about you and your finances. Aside from the first indication of a lack of written notice, other tell-tale signs that the caller is actually a tax scammer include:

  • Threats to call the police to have you arrested for a failure to pay.
  • Requesting you to provide a credit card or debit card for payment over the phone.
  • A lack of respect for your rights as a taxpayer, including a lack of regard for the appeal process to which you are entitled.
  • Requiring you to pay in a certain form, often by prepaid debit card.

Understanding how a tax scammer operates can save you from the headaches, hassles and financial losses that can often accompany falling victim to a tax scam.

The IRS Announced FATCA Scammers are now Targeting Financial Institutions

While scammers have long leveraged the fears and anxieties felt by individual taxpayers, the aggressive moves by the IRS and the US government to detect American taxpayers with undisclosed overseas accounts has created similar compliance fears within the financial industry. According to a press release published by the IRS, scammers have recognized the new climate created by Foreign Account Tax Compliance Act (FATCA) and are attempting to exploit the fears of foreign and domestic banks to obtain confidential personal information.

For holders of foreign accounts and investments, this news provides yet another reason that an experienced tax lawyer can be extremely valuable. Even if you are unaffected by the scam, the Bank Secrecy Act creates an obligation to disclose foreign accounts where the aggregate value has exceeded $10,000 at any time during that tax year. Failure to comply can create huge liabilities.

Put our experience resolving tax problems to work for you

The tax attorneys of the Brager Tax Law Group work strategically and meticulously to help correct tax problems created by tax scams or noncompliance. To discuss your concerns confidentially, contact the Brager Tax Law Group online or call 800-380-TAX LITIGATOR to discuss your options.

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