Tax fraud and evasion pose serious problems for both Georgia taxpayers and the IRS alike. They cost the agency resources every year and can lead to even innocent taxpayers facing stiff penalties. To heighten public awareness, the IRS publishes an annual list of the top 12 tax scams. The 2016 list includes falsification of wages, exaggerated claims and off-shore sheltering of assets. It also lists several scams Georgia residents should be wary of during tax season.
According to research, an IRS audit is most likely to spot three common tactics. Falsification of income is done by filers to access otherwise unavailable credits. Exaggerated claims are often made by businesses and individuals over-estimating deductions. Tax avoidance is an effort to prevent taxation of assets stashed in an overseas account or complicated investments.
Of particular concern for honest taxpayers is the chance of encountering fraudulent services or having their personal information stolen for a false claim. Identity theft can take many forms, and victims could end up facing an IRS levy on their wages and losing their refund altogether. In the case where a service is hired to prepare a refund, consumers can even face penalties. When contracting services, the IRS list points to the need for vigilance before signing off on a tax return.
In the event of return mistakes or outright fraud, consumers can quickly find themselves facing the intimidation of an audit and a threat of severe consequences. This can place financial hardship on families and cause emotional damage. Regardless of the stage of the proceedings, an attorney can often be of assistance by serving as an intermediary for communications between the IRS and the client.