Today, we received a timely insightful email from SBA.GOV and would like to share with all the Meylah community since tax season is around the corner. 

The following is a guest post by the IRS.

IRS urges you to pay close attention so your small business doesn't fall prey to one of the “Dirty Dozen” worst tax scams.

Here are the scams:

1. Frivolous Tax Arguments - Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims. The penalty for filing a frivolous tax return is $5,000.

2. Abusive Tax Shelters - Everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered.

3. Falsifying Income to Claim Credits - Taxpayers are sometimes talked into investing income by scam artists to erroneously qualify for tax credits, such as the Earned Income Tax Credit. This scam can lead to paying back taxes, interest and penalties, and criminal prosecution.

4. Falsely Padding Deductions - Taxpayers should avoid the temptation of falsely inflating deductions or expenses on their returns to under pay what they owe or possibly receive larger refunds. 

5. Excessive Claims for Business Credits - The fuel credit is generally limited to off-highway business use, including use in farming. Taxpayers should also avoid misuse of the research credit. 

6. Falsely Inflating Refund Claims - Be wary of anyone who asks taxpayers to sign a blank return, promises a big refund before looking at their records, or charges fees based on a percentage of the refund. 

7. Fake Charities - Be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. 

8. Return Preparer Fraud - There are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers.

9. Identity Theft - Taxpayers need to watch out for identity theft especially around tax time. Secure your social security number, and never respond to unsolicited requests for personal information by phone, mail, or online.

10. Phone Scams -  Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. Scam artists threaten taxpayers with police arrest, deportation, and license revocation.

11. Phishing Schemes - The IRS will never send taxpayers an email about a bill or refund out of the blue. Be wary of strange emails and websites that may be nothing more than scams to steal personal information. 

12. Offshore Tax Avoidance - The IRS offers the Offshore Voluntary Disclosure Program (OVDP) to enable people to catch up on their filing and tax obligations.