Community Corner

Tax Tips: Avoid the 'Dirty Dozen' - False/Inflated Income and Expenses

Tax time is here. Check this list of 12 scams that come in many forms during the filing season.

 

Editor's Note: The following information is provided by the IRS:

False/Inflated Income and Expenses

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Including income that was never earned, either as wages or as self-employment income in order to maximize refundable credits, is another popular scam. Claiming income you did not earn or expenses you did not pay in order to secure larger refundable credits such as the Earned Income Tax Credit could have serious repercussions.  This could result in repaying the erroneous refunds, including interest and penalties, and in some cases, even prosecution.

Additionally, some taxpayers are filing excessive claims for the fuel tax credit. Farmers and other taxpayers who use fuel for off-highway business purposes may be eligible for the fuel tax credit. But other individuals have claimed the tax credit although they were not eligible. Fraud involving the fuel tax credit is considered a frivolous tax claim and can result in a penalty of $5,000.

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