The IRS is warning individuals and businesses to steer clear of the following popular tax scams in 2014:
1) Identity theft or identity fraud-Never give out your social security number, birthdate, name or address to somebody you don't know. Their attempt may be to claim a tax refund that belongs to you.
2) Telephone requests for payment of Federal taxes-Back taxes should never be paid by prepaid debit cards. This payment method is untraceable and is always a scam.
3) Phishing to acquire personal, sensitive information-Be aware that the IRS never contacts taxpayers by email. Forward the email to your tax professional for a second opinion.
4) Return preparer fraud-Never hire tax return preparers who promise large refunds who have never even reviewed your current or past tax returns. Make sure the tax return preparer always signs your return and uses a PTIN number, which is registered with the IRS.
5) Hiding income using offshore banks-Be mindful of claims by advisors who can place your investments offshore to prevent paying income taxes on the earnings.
6) Phony charities or impersonation of charitable organizations-Watch out for unsolicited requests for charitable donations over the phone, by email or snail mail.
7) Fraudulent tax credits-Do not include income that was never earned on your tax return to claim refundable credits.
8) Frivolous tax arguments-When responding to tax notices, do not make "frivolous" arguments with the IRS. There are several common frivolous arguments made by individuals who oppose compliance with tax laws, all of which have all been rejected by the courts.
9) Investments-Do not purchase tax shelter investments which seem too good to be true without asking for independent advice.
10) Filing of false Form 1099s-Taxpayers who attempt to either change or file an incorrect information form could be subject to financial penalties or even jail time.