INDIANAPOLIS – The Indiana Department of Revenue (DOR) encourages customers to take a note from Abraham Lincoln’s book and be honest when filing their taxes this season.
Claiming income that was not earned, overstating deductions or falsely claiming credits are just a few of the examples DOR has identified this filing season that individuals are attempting to use in a fraudulent manner to get a larger refund or owe less.
“DOR is a national leader in tax fraud prevention,” stated DOR Commissioner Adam Krupp, “by our ability to detect all types of tax fraud including ever-evolving schemes such as falsifying income or credits and deductions. In 2018, DOR’s fraud team stopped over $1.1 million in this type of tax fraud alone.”
The Earned Income Tax Credit is often the reason why taxpayers or deceitful tax preparers report incorrect income because using this credit often results in a much larger refund for the taxpayer.
“Falsely reporting income to DOR can result in heavy interest and penalties for taxpayers when paying back erroneous refunds,” said Commissioner Krupp. “The best advice, only claim what you have documentation to support.”
Customers are encouraged to simply be honest when filing for themselves or ensure their preparer is being honest and accurate. Most importantly, customers are responsible for what is submitted to DOR and the IRS regardless of who prepares the tax return.
Another form of falsifying income involves a scheme disguised as debt payment options for credit cards or mortgage debt. Individuals file Form 1099-MISC for Miscellaneous Income or bogus financial documents, such as bonds or checks.
One way for individuals to ensure they file an accurate tax return and claim only the tax benefits they’re eligible to receive is by using tax preparation software. Question and answer formats lead taxpayers through each section of the tax return.