Panda SecurityThe Internal Revenue Service (IRS) has launched a new web page to streamline the process for taxpayers reporting suspected tax fraud. The website is meant to let people confidentially report suspected tax-related crimes, including but not limited to tax fraud, scams, evasion, or other tax-related illegal activities. They are not only after malicious websites and identity theft bad actors. But also looking for tips on tax fraud, scams, and even shady tax preparers. IRS wants to know if a paid preparer filed a fraudulent return on your behalf or if they followed improper tax preparation practices. The IRS believes the new website will play an important role in uncovering fraud and supporting the integrity of the nation’s tax system.
Key takeaways
- The IRS launched a new, easier way to report suspected tax fraud and it is open to everyone.
- The IRS actively wants reports on tax preparers, who promise high tax refunds by unethically boosting expenses.
- People consider using a qualified CPA a safer choice when picking a tax prep service provider.
- Whistleblower rewards by the IRS exist, but the government agency prioritizes high-impact cases.
How to recognize scams and fraud attempts during tax season?
The red flags come in different shapes and sizes, spanning from bad tax prep advice often seen trending on social media, to IRS impersonators who are trying to steal personal information. And eventually commit identity theft crimes.
The people taxpayers should trust – the tax preparers – can also commit misconduct. The IRS wants reports on tax preparers who illegally inflate clients’ refunds by misrepresenting information. Last but not least, scam attempts can take the form of malicious websites that either mimic the IRS or pretend to help taxpayers get the maximum tax refund. But in reality steal personal information that is later used to commit various types of identity fraud.
Are some tax preparers shady?
Yes, they are. The IRS prosecutes hundreds of tax prep workers every year, and most receive prison sentences and have their licenses revoked. The IRS convicts a large majority of the people it decides to prosecute.
One way for people to have peace of mind when filing taxes is to have their tax prep done by a CPA. CPAs are often subject to increased scrutiny if they misrepresent facts. And are often more knowledgeable than regular tax prep workers. In general, people with active CPA licenses are less likely to advise their clients to use questionable tax return tactics.
What cases does the IRS want you to report, and what are the IRS whistleblower awards?
The IRS encourages people to report any misconduct, but it generally pursues the larger cases. Individuals who are making more than $200k per year and cases whose investigation could lead to the collection of $2+ million in unpaid taxes would likely be the cases IRS agents might be willing to consider for prosecution. The IRS also offers whistleblower awards, which can help people receive a bounty of 15% to 30% of the amount collected for tipping off the IRS about fraudulent activity.
IRS indeed wants people to report bad tax practices. However, even though their new website offers an option to report other websites, they likely won’t be able to do much against malicious websites or bad advice on social media. However, being vigilant and working with qualified, reputable tax prep companies can help you get the most out of your tax return, which is as important as ensuring proper cybersecurity on all your connected devices.
High-end antivirus software solutions are often designed to put a digital dome over your smart devices and generally protect you against scam emails, texts, and websites that aim to steal personal information. And share it with fraudsters.
