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.
Claiming income that was not earned in order to maximize refundable tax credits is the ninth scam in the 12-part series. This fake income can be in the form of wages or as self-employment income.
The Earned Income Tax Credit is often the reason why taxpayers or deceitful tax preparers report incorrect income. Using this credit often results in a much larger refund for the taxpayer.
“Falsely reporting income to DOR or the IRS can result in heavy interest and penalties for taxpayers when paying back erroneous refunds,” said DOR Commissioner Adam Krupp.
“Our biggest recommendation to taxpayers during tax season is to be honest in their filing, and to ensure their preparer is being honest and accurate in what they prepare. No matter if the filing is individually done by the taxpayer or completed by a tax professional, the taxpayer is responsible for what is submitted to DOR and the IRS. Avoid the risks by only claiming what you have documentation to support.”
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.
To view the first eight of “IRS Dirty Dozen” tax scams of 2018, visit http://www.in.gov/dor/6137.htm.