Every year, the IRS releases their list of what they call “the dirty dozen”.
(Apparently, the marketing gurus who work at the IRS think that if they give it a catchy name, maybe even a pop-culturey one, the people will pay more attention.)
But aside from the cheesy name, this is a list to know about.
That’s because it highlights the biggest sources of fraud and thievery that circle around the tax world.
The entire list is interesting, but there are two primary ones I want to highlight to you.
Ghost preparers and “Offer in Compromise” mills.
Here’s how to spot them…
Offer In Compromise Mills And Other Tax Scams For Greater New York City Taxpayers To Avoid
“You learn something every day if you pay attention.” – Ray LeBlond
The hits keep coming for 2020.
And add “coronavirus relief” to the yearly list of tax-related scams that the IRS produces, the cutely-named Dirty Dozen.
The entire list is:
- Ghost and other unscrupulous tax preparers
- COVID-19 economic relief payment or tax refund theft
- Fake charities
- IRS impersonators’ threatening phone calls
- Social media scams
- Senior fraud
- Scams targeting non-English speakers
- Offer in Compromise mills
- Fake payments with repayment Demands
- Payroll and HR scams
Many of these are self-explanatory, but allow me to explain about the two I highlighted…
Ghost Tax Preparers
Have you ever had a local Greater New York City tax professional prepare a return for you and then ask you to sign AND file it? If so… ruh roh. You’re dealing with a ghost tax preparer.
These are the ones who don’t want to pay the $21 to get licensed by the IRS, and attach their name to a return.
It usually means that they’re either very cheap … or don’t want to be “on record” for what they’re doing for your return. This could be that they’ve already been sanctioned and are not allowed to be preparing taxes for a fee. Or that they know that what they’re doing isn’t allowable, and they want YOU to be on the hook for it.
Run away, and fast.
Offer in Compromise “Mills”
These are the Greater New York City crooks who give what we do here at Allan J Rolnick, CPA, CTC a bad name.
You might even have seen late night TV ads or heard radio blurbs from those who promise to “settle your IRS debts for pennies on the dollar” or provide a “90% reduction settlement”.
The problem with these big promises — this program does NOT work for everyone.
In fact, recent IRS data shows that in 2019, there were 54,000 OICs submitted to the IRS. The agency accepted only 18,000 of them (33%).
The good news for you is that we have other tools in our toolbox here to help you with your IRS problems.
But if you get taken in by one of these fraudulent OIC mills … all you get is (broken) promises. People have been to jail for making these promises, and tens of thousands of taxpayers have been suckered by them.
So … as we’ve all been saying in 2020: stay safe out there.
Work with someone who stands by their name, and who gets things done without selling you beachfront property in Arizona.
Allan J Rolnick
Allan J Rolnick, CPA, CTC