At Terrence A. Grady & Associates, our knowledgeable lawyers offer the best guidance possible to our clients in Columbus and other Ohio communities, including when it comes to tax scams and schemes you need to avoid. Sadly, tax scams and schemes are always evolving, affecting Ohio taxpayers, businesses, and tax professionals alike. The IRS is continually working to help make the public aware of the many tax schemes that you need to watch out for. This includes releasing their “dirty dozen” for taxpayers, businesses, and tax professionals in Ohio and other U.S. communities to be aware of.
Who Can Be Affected by Tax Scams?
The attorneys at Terrence A. Grady & Associates have helped many different taxpayers, businesses, and tax professionals who are victims of tax scams and schemes. This includes those in Ohio communities, such as Columbus, Cleveland, Cincinnati, Toledo, Akron, Dayton, Parma, Canton, Lorain, Hamilton, Youngstown, Springfield, and others. It is important for all taxpayers, business owners, and tax professionals in Ohio to know the details about these tax scams to help protect themselves and their businesses.
The Dirty Dozen Tax Scams & Schemes for 2023
Below is a summary of each of the most common tax scams and schemes from the IRS “Dirty Dozen” list for 2023 that those in Ohio need to know about in order to help avoid tax issues, theft, and potential identity theft. At Terrence A. Grady & Associates, we advise our clients, as well as anyone else, to familiarize themselves with these scams and schemes to better protect themselves.
Employee Retention Credit (ERC) Claims
Scammers often pitch large tax refunds in regard to the legitimate Employee Retention Credit program. However, anyone interested in the program should research their eligibility before contacting scammers or anyone else promoting assistance in getting ERC refunds. Often, these scammers simply utilize promises of large ERC refunds to conduct identity theft.
Phishing & Smishing
Sadly, scammers often pose as representatives from legitimate tax organizations, such as the IRS. They contact taxpayers through unsolicited text messages and emails, hoping to lure them into providing valuable personal and financial information. However, taxpayers, businesses, and tax professionals in Ohio should know that the IRS and other legitimate tax organizations will most often contact you through physical mail and never by email, text, or social media.
Online Account Help From Third-Party Scammers
Scammers also typically pose as a third party willing to help taxpayers create an online account for the IRS’ website: IRS.gov. Yet, this can be an opportunity for scammers to acquire valuable tax information. So be sure to only set up an online account through IRS.gov.
Any time there is a crisis or natural disaster, scammers typically set up bogus charities. Sadly, these false organizations take advantage of the public’s generosity. Taxpayers should be aware that deductions for charitable donations only count if their donation goes to a qualified tax-exempt organization that is recognized by the IRS.
Unscrupulous Tax Return Preparers
Most tax preparers in Ohio communities offer professional services. But unfortunately, there are fraudulent tax professionals who take advantage of taxpayers. Avoid any tax professional that charges a fee based on the size of your tax refund, is unwilling to sign the dotted line, or does not include their IRS Preparer Tax Identification Number (PTIN) as required by law.
Social Media Scams: Fraudulent Form Filing & Bad Advice
Sadly, social media can circulate misleading or entirely inaccurate information regarding taxes. Taxpayers should never submit false or inaccurate information to try and get a tax refund. Overall, if something sounds too good to be true on social media, it most likely is.
False Fuel Tax Credits
In the U.S., including Ohio, there is a fuel credit for off-highway business and farming use. It is not available to most taxpayers. Sadly, many scammers and unscrupulous tax preparers prompt taxpayers to erroneously claim the credit, which can inevitably result in tax issues.
Spearphishing & Cybersecurity for Tax Professionals
Tax professionals are often targets for tax scams and schemes – since they often possess an abundance of valuable tax information. As such, tax preparers and other professionals must consistently make themselves aware of phishing schemes in order to avoid having their personal information or client information taken advantage of.
Offer in Compromise Mills
Offers in Compromise are part of an essential program to help those who cannot pay to settle their federal tax debts. However, mills will aggressively and misleadingly promote Offers in Compromise to those who do not meet the program’s qualifications. Instead, utilize the IRS’ Offer in Compromise Pre-Qualifier tool in order to check your eligibility.
Bogus Tax Avoidance Strategies
Many tax scammers and schemers will take advantage of taxpayers by offering bogus ways to avoid paying taxes. This can include micro-captive insurance arrangements as well as syndicated conservation easements.
False micro-captive insurance companies create structures that include implausible risks, fail to match a business’ needs, and even duplicate commercial coverages. So taxpayers and businesses should only utilize trusted micro-captive insurance companies to avoid falling victim to these scams and schemes.
Conservation easements are restrictions on the use of real property. Typically, taxpayers will claim a charitable contribution dedication for the fair market value of a conservation easement, which is transferred to a charity. However, in abusive arrangements, scammers will try to take advantage of the tax system, grossly inflating tax deductions, which can inevitably lead to tax issues.
Contact Us at Terrence A. Grady & Associates Tax Law Services in Ohio!
At Terrence A. Grady & Associates, our team wants taxpayers, tax professionals, and businesses in Columbus and other Ohio communities to be better protected from tax scams and schemes, which is why we have shared the IRS’ “Dirty Dozen” list of tax scams to help raise awareness. However, awareness is not always enough to avoid a scam or tax issues. At Terrence A. Grady & Associates, we offer tax law services in Ohio and the rest of the United States, including for civil tax disputes, settling tax liabilities, federal white-collar tax crime, and more.
So if you have been contacted by the IRS related to participation in a tax scam or are in need of legal tax representation, contact the attorneys at Terrence A. Grady & Associates for assistance!