If you’re like most Americans, you don’t exactly relish the approach of April 15, a.k.a. the Ides of April, or simply Tax Day. This year tax season has a particularly painful sting for those of us who must cut a fat check to Uncle Sam or Aunt Judy, especially when you consider that the recently bankrupt Enron, which made tens of millions in profits, managed to avoid paying one lousy dime in federal taxes in five of the last six years. Makes you think about sending your tax bill in pennies—wrapped in a dirty diaper.
Still, for us “little people” (as Leona Helmsley once called us working stiffs), there’s no escaping death or taxes, but we can avoid a different type of tax fraud—the kind perpetuated by the shysters looking to capitalize on your anger and contempt for the federal tax code. So the folks at our regional office of the Internal Revenue Service (IRS) have issued a list of illegal tax schemes currently making the rounds:
The African-American Special Tax Refund: According to the IRS, thousands of African-Americans have been swindled by con artists promising them a “black tax credit,” presumably as a reparation for years of slavery. To add insult to injury, the IRS can fine you up to $500 for filing such a claim. In Dallas, Texas, minister Willie Foster was sentenced to two years in prison in 1999 after being found guilty on three counts of filing such claims. Foster requested a “black tax” credit and received a check of more than $30,000 from the U.S. Treasury before being busted. While this con isn’t likely to get much mileage in Wonder Bread-white Missoula, the same holds true for Native Americans, Latinos and all other ethnic groups.
Pay the tax, get the prize: A caller will inform you that you’ve won a prize and all you need to do is pay the overdue income tax to claim it. Hint: In the remote chance that you ever win a sweepstakes, a car, a boat or a free cruise to Temptation Island, Ed McMahon and his ilk will send you a 1099 form telling you what you need to claim in taxes. They WON’T come by the house and collect the taxes in person.
“Untax yourself for $49.95:” This scheme is as old as the pyramids, but still scams thousands of suckers each year and is now being peddled via the Internet. The ads promise you a kit for “untaxing” yourself with the argument that paying taxes is “voluntary.” Sure, and so is a four-year stint in the federal Barbed Wire Inn. Not only is the advice bogus, but you’ll get double-whammied for civil and/or criminal penalties to boot.
Share or borrow dependents: As much as some parents would love to “share” their kids with someone else for, say, the duration of their terrible twos or most of their teenage “wonder” years, the IRS frowns on child-swapping. Still, some unscrupulous tax preparers try to convince their clients that since the parents of four children need only declare two for them to reap the maximum earned income tax credit, the other two dependents can be “shared” with other offspring-impaired taxpayers—for a modest fee. Sorry, no dice. Do not pass Go, do not collect $200.
An IRS “agent” will come to your home to collect your taxes at your door: Frankly, it’s hard to imagine anyone would attempt this scam in Montana, where even a legit federal agent knocking on the screen door runs a good chance of getting a rump full of buckshot, but so it goes. Remember, IRS agents and field auditors carry photo IDs. When in doubt, lock the door and call the cops.