Beware of Tax Cheats in California

Tax scams are all around us. Don’t fall victim to them! These schemes take several forms, ranging from promises of large tax refunds to illegal ways of escaping your tax obligations. These scams emanate from everywhere including Los Angeles, Santa Barbara, Orange, Ventura; no county in California is immune.

No matter what you are told, remember these three things:

Sign a tax return only after looking it over to make sure it is accurate.

Anyone who promises you a bigger refund without knowing your tax situation is probably misleading you.

You are responsible and liable for the content of your income tax return.

Here’s a sample of some common tax schemes to be avoided:

Frivolous Arguments: Scam artists have been known to make absurd claims that the Sixteenth Amendment concerning congressional power to establish and collect income taxes was never ratified; that wages are not income; that filing a return and paying taxes are merely voluntary; and that being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy. Don’t believe these or other similar claims. Such arguments are false and have been thrown out of court. You always have the right to contest their tax liabilities in court but you have no right to disobey the law.

Telephone Tax Refund Abuse: Some individual taxpayers have requested large and improper amounts for the special refund of the telephone tax. In some cases, taxpayers appear to be requesting a refund of the entire amount of their phone bills, rather than just the three-percent tax on long-distance and bundled service. The IRS is investigating potential abuses. You may request a refund on your 2006 tax return if you paid long distance telephone excise taxes after February 28, 2003 and before August 1, 2006. Generally, the telephone tax refund will be $30 to $60.

Identity Theft: The IRS does not use e-mail to contact us about issues related to our accounts. If you have any doubt whether a contact from the IRS is authentic call 800-829-1040 to confirm it. It pays to be choosy when it comes to disclosing personal information. Identity thieves have used stolen personal data to access financial accounts, run up charges on credit cards and apply for new loans. The IRS is aware of several identity theft scams involving scammers posing as the IRS itself.

Return Preparer Fraud: Avoid being victimized by dishonest tax return preparers who can cause endless headaches for you. These preparers derive financial gain by skimming a portion of your refund and charging inflated fees to prepare your tax return. They attract new clients by promising large refunds. Beware.

If you think you’re about to be scammed, call a qualified tax attorney to discuss it before it happens. Call Mitchell A. Port at (310) 559-5259.