You might think of the folks at the IRS as humorless, mean-spirited sorts who are just out to grab your money. If so, shame on you. They're just doing their jobs, after all, and our taxes keep the lights on in our great nation.
Sometimes, the IRS is even trying to help us. Every year, it issues a list of the top 12 tax scams that citizens should watch for. Here are a few:
- The first one relates to the telephone excise-tax refunds that we can claim this year. (In January, I noted that companies such as AT&T
(NYSE:T), Qwest (NYSE:Q)and Vonage (NYSE:VG)were supporting it.) Unfortunately, many people don't seem to understand how this refund works, and they're trying to claim the total amount of their phone bills for the period in question. Some tax pros are even filing inaccurate claims. The IRS is on the lookout for problems in this area.
- Next up are "abusive Roth IRAs." As you'll see in our IRA Center, Roth IRAs are wonderful retirement-saving devices -- but you need to stick to the rules. Some shifty financial advisors are suggesting that people shift artificially "undervalued stock" into Roth IRAs in an attempt to exceed the maximum contribution limits. That's a bad idea.
- We've covered the ubiquitous peril of "phishing" many times before. Keep in mind that it can extend to your taxes, too. If you receive an email telling you to click here or there to learn how to grab a refund that's due to you, just say no. Like most reputable companies and government agencies, the IRS doesn't send emails asking people to disclose personal information. Even though clicking on phishing links will usually take you to websites that look legitimate, don't fall for it.
In general, it all boils down to one rule: When it comes to preparing and submitting your tax return, be honest -- and be careful.