The IRS Warns Against These Tax Scams

It's tax season and that means tracking down all your forms, maximizing your write-offs with things like the mileage deduction and potentially getting a refund. The scammers are also out in force this time of year.

Here are some common tax scams the IRS has rounded up and some tips on how to avoid them.

Phone Call Scams

There are thousands of scammers who try to trick people over the phone every year. This often involves somebody claiming you owe taxes or penalties and if you don't pay quickly, you'll be faced with punitive measures—including jail.

What's insidious about this is that the scammers can have legitimate information about you including your name, address or Social Security number.

The IRS will never:

• Demand that you pay taxes without giving you the chance to question or appeal the amount they say you owe
• Require a certain payment method for your taxes, such as a prepaid debit card
• Call you about taxes you owe without first mailing you an official IRS notice
• Ask for credit or debit card numbers over the phone
• Threaten to bring in local police or other law enforcement to have you arrested for not paying.

Watch Out For Identity Theft

The government agency has warned tax preparers and taxpayers to be on the lookout for identity theft. Fraudsters are willing to steal your personal information and will file a tax return. They can also potentially receive a fraudulent refund meant for you.

What can you do to protect yourself from identity theft? Here are a few tips:

• Protect personal data: Don't carry your Social Security card around unless you have to.
• Exercise good cyber security: Use strong passwords that you change often. Use security software for your devices.
• Avoid scammers via phone, email or text: Learn to spot phishing attacks and be wary if you receive threatening calls or texts that are supposedly from legitimate organizations.

Make Sure Your Tax Pro Is Above Board

Speaking of tax professionals, make sure you're choosing a reputable one. Paid tax return preparers are required to obtain an IRS Preparer Tax Identification Number (PTIN). You can check on your preparer's qualifications with this IRS tool.

The IRS suggests:

• Avoid preparers who charge fees based on the size of your refund
• Make sure your tax professional provides records and receipts
• Never sign a tax return without reviewing it.
• Report any abusive tax professionals to the IRS immediately.

Avoid Padding Your Deductions

The IRS warns against padding your tax deductions. "Taxpayers should think twice before overstating deductions such as charitable contributions, padding business expenses or including credits they are not entitled to receive," the IRS wrote.

The IRS puts padding your deductions on its "Dirty Dozen" list of tax scams to avoid. It's notable that this is the only "scam" on the list perpetrated by the taxpayer. That's how serious the government agency is about making sure you can prove your deductions.

Here are some tips to make sure you're getting the deductions you deserve without triggering an IRS audit:

• No matter how tempting it may be to pad a little more on, claim the legitimate figure you're allowed to deduct
• Have proper documentation of your records including mileage, receipts and more
• Keep your records for up to five years after you submit a return. Services like MileIQ automatically store your records in the cloud. You can easily access them years down the road.

To view the original article, visit the MileIQ blog.