IRS Issues Updated Warning about Tax Scams Targeting U.S. Taxpayers

The Internal Revenue Service (IRS) recently issued a News Release warning about tax scams targeting U.S. taxpayers. The News Release follows similar warnings issued previously; and, as noted by Virginia tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, taxpayers who fall victim to these scams can face a variety of challenges.

The IRS’ News Release, issued on June 30, 2021, states: “The IRS continues to see a group of ruses by dishonest people who trick others into doing something illegal or which ultimately causes them harm. Predators encourage otherwise honest people to do things they don't realize are illegal or prey on their goodwill to take something from them.” Thus, not only can taxpayers lose money as a result of falling victim to these scams, but they can potentially get into trouble with the IRS as well. While taxpayers who fall victim to scams don’t deserve to face the same penalties as those who intentionally underpay what they owe, avoiding unnecessary consequences typically requires experienced legal representation.

5 Tax Scams that Can Lead to Problems with the IRS

The IRS is urging U.S. taxpayers to watch out for five tax scams in particular for the remainder of 2021 and when preparing their federal returns next year. These scams are:

1. Fake Charity Scams

Fake charity scams are particularly common during and after major disasters, and the IRS is warning in particular of scams related to the COVID-19 pandemic. Taxpayers who donate money to fake charities can face consequences from the IRS when they improperly claim deductions for these donations on their returns.

2. IRS Impersonation Scams

According to the IRS, impersonation scams remain common. Impersonators, who claim to be affiliated with the IRS, often target individuals in vulnerable populations such as immigrants and seniors. These scammers will often use scare tactics such as threatening jail time or deportation in an effort to collect taxpayers’ personal information to use for illegal purposes.  

3. Offer in Compromise “Mills”

The IRS’s offer in compromise (OIC) program offers a way for qualifying taxpayers to reduce their federal income tax liability. As described by the IRS, OIC mills “contort the IRS program into something it's not – misleading people with no chance of meeting the requirements while charging excessive fees, often thousands of dollars.” In doing so, they often create even greater tax problems that require the assistance of an experienced Virginia tax attorney.

4. Unscrupulous Tax Return Preparers

“Ghost” return preparers—those who do not sign taxpayers’ returns—are becoming increasingly common. These unscrupulous preparers generally are not qualified to assist taxpayers with their returns; and, as a result, taxpayers who use them frequently end up submitting false information to the IRS.

5. Unemployment Insurance Fraud

“Unemployment fraud often involves individuals acting in coordination with or against employers and financial institutions to get state and local assistance to which they are not entitled. These scams can pose problems that can adversely affect taxpayers in the long run.” These scams are becoming increasingly common as well, and they can lead to a host of problems for employers that unwittingly violate the law.

Request an Appointment with Virginia Tax Attorney Kevin E. Thorn

If you believe that you or your company may be the victim of a tax scam, you should consult with an attorney promptly. Virginia tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, is available to assist with any and all matters involving the IRS. To request an appointment with Mr. Thorn as soon as possible, call 703-752-3752, email ket@thornlawgroup.com or contact us confidentially online now.