Indiana Department of Revenue Warns Against Falsely Padding Deductions

INDIANAPOLIS – The Indiana Department of Revenue (DOR) continues to partner with the Internal Revenue Service (IRS) to share the top tax filing season concerns referred to as the “IRS Dirty Dozen” tax scams for 2018.

The eighth scam in the 12-part series is falsely inflating deductions or expenses on tax filings. This scam often includes overstating charitable contributions, padding business expenses or including credits a taxpayer is not entitled to, in order to receive a larger refund or owe less.

These tactics, while often perpetuated by deceitful tax preparers, are also attempted by taxpayers. The Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) are the two most commonly abused. These credits were designed to benefit low and moderate-income taxpayers.

The EITC is a credit for qualified individuals who work and have earned income under $45,000. To claim this credit you must be specific qualifications. More information on the EITC can be found on DOR’s website at http://www.in.gov/dor/5695.htm.

The CTC was adopted to reduce the tax liability of families, with a credit of up to $1,000 per qualifying child under age 17.

More information on the CTC can be found on the IRS website at https://www.irs.gov/credits-deductions/individuals/child-tax-credit-glance.

Both the EITC and CTC significantly reduce tax liabilities on low and middle-income families with children.

“Falsely claiming charitable contributions or credits will only lead to a long, drawn out audit process no one wants to experience, and typically leads to additional scrutiny the following filing season as well,” said Commissioner Krupp.

To view the first seven of “IRS Dirty Dozen” tax scams of 2018, visit http://www.in.gov/dor/6137.htm.