…And the Latest Tax Scam is…

On the anniversary of the corporate tax return deadline and just 30 days away from the personal deadline our attention has clearly shifted to tax preparation issues. This year has a new (SIGNIFICANT) wrinkle – there are penalties assessed if you don’t have health insurance due to the Affordable Care Act. And these show up on your tax return as well.

Some unscrupulous tax preparers are telling taxpayers that the penalties can be paid to the tax preparer, who will then negotiate a reduced fee with the IRS.

If you’re approached with such a proposition, RUN! The penalties are not negotiable and fees owed to the IRS should only be paid directly to the IRS. This is simply an attempt to collect the money and abscond with the funds. And unfortunately, if you fall for the scam, you’ll have lost the money you gave to the tax preparer and still owe the money to the IRS – a double whammy!

Remember some basic rules when it comes to taxes – a tax preparer should prepare the taxes, not collect them. Payments always go to the IRS, without anyone in between. And despite numerous claims by numerous organizations, there are not automatic programs to reduce your taxes – nothing at the IRS is automatic and nothing happens fast.

If anyone tells you different, check your BS meter and be careful!