File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

College Student Filing Taxes

Tax Form 1040nr EzH&r Block Amended ReturnWww Irs Gov FormspubsFiling A Tax Amendment1040x FillableHow Do I File 2011 Taxes OnlineHow To Ammend A Federal Tax ReturnFree Irs Tax Filing 2012File Taxes 2008Vita Tax ServicesTax AmendmentWhere To Get Tax Form 1040xMilitary Tax Refund CalculatorE-file Tax Extension FreeIrs 1040ez FormFree Electronic Tax FilingFile 2010 Tax ReturnFreetaxusa 2012File 1040x Free1040x Form 2012H&r Block Free Tax Software1040nr EfileFile State Federal Taxes FreeMyfreetaxes 2013Hr Block Free Efile2012 TaxFile Free H&r BlockHow To Amend 2012 TaxesFree Federal And State Tax Filing 2012Lowest Price State Tax FilingTax Act 1040xFree Income Tax ExtensionTax Amendment Form 2011Do College Students Have To File TaxesState Tax Help2010 Tax Form 1040ezFederal Tax Amendment FormFile 2012 Income TaxWwwh&rblock ComMy Free Taxes

College Student Filing Taxes

College student filing taxes 5. College student filing taxes   Soil and Water Conservation Expenses Table of Contents Introduction Topics - This chapter discusses: Business of Farming Plan Certification Conservation ExpensesWater well. College student filing taxes Assessment by Conservation DistrictAssessment for Depreciable Property 25% Limit on DeductionNet operating loss. College student filing taxes When to Deduct or Capitalize Sale of a Farm Introduction If you are in the business of farming, you can choose to deduct certain expenses for: Soil or water conservation, Prevention of erosion of land used in farming, or Endangered species recovery. College student filing taxes Otherwise, these are capital expenses that must be added to the basis of the land. College student filing taxes (See chapter 6 for information on determining basis. College student filing taxes ) Conservation expenses for land in a foreign country do not qualify for this special treatment. College student filing taxes The deduction for conservation expenses cannot be more than 25% of your gross income from farming. College student filing taxes See 25% Limit on Deduction , later. College student filing taxes Although some expenses are not deductible as soil and water conservation expenses, they may be deductible as ordinary and necessary farm expenses. College student filing taxes These include interest and taxes, the cost of periodically clearing brush from productive land, the regular removal of sediment from a drainage ditch, and expenses paid or incurred primarily to produce an agricultural crop that may also conserve soil. College student filing taxes You must include in income most government payments for approved conservation practices. College student filing taxes However, you can exclude some payments you receive under certain cost-sharing conservation programs. College student filing taxes For more information, see Agricultural Program Payments in chapter 3. College student filing taxes To get the full deduction to which you are entitled, you should maintain your records to clearly distinguish between your ordinary and necessary farm business expenses and your soil and water conservation expenses. College student filing taxes Topics - This chapter discusses: Business of farming Plan certification Conservation expenses Assessment by conservation district 25% limit on deduction When to deduct or capitalize Sale of a farm Business of Farming For purposes of soil and water conservation expenses, you are in the business of farming if you cultivate, operate, or manage a farm for profit, either as an owner or a tenant. College student filing taxes You are not in the business of farming if you cultivate or operate a farm for recreation or pleasure, rather than for profit. College student filing taxes You are not farming if you are engaged only in forestry or the growing of timber. College student filing taxes Farm defined. College student filing taxes   A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. College student filing taxes It also includes plantations, ranches, ranges, and orchards. College student filing taxes A fish farm is an area where fish and other marine animals are grown or raised and artificially fed, protected, etc. College student filing taxes It does not include an area where they are merely caught or harvested. College student filing taxes A plant nursery is a farm for purposes of deducting soil and water conservation expenses. College student filing taxes Farm rental. College student filing taxes   If you own a farm and receive farm rental payments based on farm production, either in cash or crop shares, you are in the business of farming. College student filing taxes If you get cash rental for a farm you own that is not used in farm production, you cannot deduct soil and water conservation expenses for that farm. College student filing taxes   If you receive a fixed rental payment that is not based on farm production, you are in the business of farming only if you materially participate in operating or managing the farm. College student filing taxes Example. College student filing taxes You own a farm in Iowa and live in California. College student filing taxes You rent the farm for $175 in cash per acre and do not materially participate in producing or managing production of the crops grown on the farm. College student filing taxes You cannot deduct your soil conservation expenses for this farm. College student filing taxes You must capitalize the expenses and add them to the basis of the land. College student filing taxes     For more information, see Material participation for landlords under Landlord Participation in Farming in chapter 12. College student filing taxes Plan Certification You can deduct soil and water conservation expenses only if they are consistent with a plan approved by the Natural Resources Conservation Service (NRCS) of the Department of Agriculture. College student filing taxes If no such plan exists, the expenses must be consistent with a soil conservation plan of a comparable state agency. College student filing taxes Keep a copy of the plan with your books and records to support your deductions. College student filing taxes Conservation plan. College student filing taxes   A conservation plan includes the farming conservation practices approved for the area where your farmland is located. College student filing taxes There are three types of approved plans. College student filing taxes NRCS individual site plans. College student filing taxes These plans are issued individually to farmers who request assistance from NRCS to develop a conservation plan designed specifically for their farmland. College student filing taxes NRCS county plans. College student filing taxes These plans include a listing of farm conservation practices approved for the county where the farmland is located. College student filing taxes You can deduct expenses for conservation practices not included on the NRCS county plans only if the practice is a part of an individual site plan. College student filing taxes Comparable state agency plans. College student filing taxes These plans are approved by state agencies and can be approved individual site plans or county plans. College student filing taxes   A list of NRCS conservation programs is available at www. College student filing taxes nrcs. College student filing taxes usda. College student filing taxes gov/programs. College student filing taxes Individual site plans can be obtained from NRCS offices and the comparable state agencies. College student filing taxes Conservation Expenses You can deduct conservation expenses only for land you or your tenant are using, or have used in the past, for farming. College student filing taxes These expenses include, but are not limited to, the following. College student filing taxes The treatment or movement of earth, such as: Leveling, Conditioning, Grading, Terracing, Contour furrowing, and Restoration of soil fertility. College student filing taxes The construction, control, and protection of: Diversion channels, Drainage ditches, Irrigation ditches, Earthen dams, and Watercourses, outlets, and ponds. College student filing taxes The eradication of brush. College student filing taxes The planting of windbreaks. College student filing taxes You cannot deduct expenses to drain or fill wetlands, or to prepare land for center pivot irrigation systems, as soil and water conservation expenses. College student filing taxes These expenses are added to the basis of the land. College student filing taxes If you choose to deduct soil and water conservation expenses, you cannot exclude from gross income any cost-sharing payments you receive for those expenses. College student filing taxes See chapter 3 for information about payments eligible for the cost-sharing exclusion. College student filing taxes New farm or farmland. College student filing taxes   If you acquire a new farm or new farmland from someone who was using it in farming immediately before you acquired the land, soil and water conservation expenses you incur on it will be treated as made on land used in farming at the time the expenses were paid or incurred. College student filing taxes You can deduct soil and water conservation expenses for this land if your use of it is substantially a continuation of its use in farming. College student filing taxes The new farming activity does not have to be the same as the old farming activity. College student filing taxes For example, if you buy land that was used for grazing cattle and then prepare it for use as an apple orchard, you can deduct your conservation expenses. College student filing taxes Land not used for farming. College student filing taxes   If your conservation expenses benefit both land that does not qualify as land used for farming and land that does qualify, you must allocate the expenses between the two types of land. College student filing taxes For example, if the expenses benefit 200 acres of your land, but only 120 acres of this land are used for farming, then you can deduct 60% (120 ÷ 200) of the expenses. College student filing taxes You can use another method to allocate these expenses if you can clearly show that your method is more reasonable. College student filing taxes Depreciable conservation assets. College student filing taxes   You generally cannot deduct your expenses for depreciable conservation assets. College student filing taxes However, you can deduct certain amounts you pay or incur for an assessment for depreciable property that a soil and water conservation or drainage district levies against your farm. College student filing taxes See Assessment for Depreciable Property , later. College student filing taxes   You must capitalize expenses to buy, build, install, or improve depreciable structures or facilities. College student filing taxes These expenses include those for materials, supplies, wages, fuel, hauling, and moving dirt when making structures such as tanks, reservoirs, pipes, culverts, canals, dams, wells, or pumps composed of masonry, concrete, tile, metal, or wood. College student filing taxes You recover your capital investment through annual allowances for depreciation. College student filing taxes   You can deduct soil and water conservation expenses for nondepreciable earthen items. College student filing taxes Nondepreciable earthen items include certain dams, ponds, and terraces described under Property Having a Determinable Useful Life in chapter 7. College student filing taxes Water well. College student filing taxes   You cannot deduct the cost of drilling a water well for irrigation and other agricultural purposes as a soil and water conservation expense. College student filing taxes It is a capital expense. College student filing taxes You recover your cost through depreciation. College student filing taxes You also must capitalize your cost for drilling a test hole. College student filing taxes If the test hole produces no water and you continue drilling, the cost of the test hole is added to the cost of the producing well. College student filing taxes You can recover the total cost through depreciation deductions. College student filing taxes   If a test hole, dry hole, or dried-up well (resulting from prolonged lack of rain, for instance) is abandoned, you can deduct your unrecovered cost in the year of abandonment. College student filing taxes Abandonment means that all economic benefits from the well are terminated. College student filing taxes For example, filling or sealing a well excavation or casing so that all economic benefits from the well are terminated constitutes an abandonment. College student filing taxes Endangered species recovery expenses. College student filing taxes   If you are in the business of farming and meet other specific requirements, you can choose to deduct the conservation expenses discussed earlier as endangered species recovery expenses. College student filing taxes Otherwise, these are capital expenses that must be added to the basis of the land. College student filing taxes   The expenses must be paid or incurred for the purpose of achieving site-specific management actions recommended in a recovery plan approved under section 4(f) of the Endangered Species Act of 1973. College student filing taxes See Internal Revenue Code section 175 for more information. College student filing taxes Assessment by Conservation District In some localities, a soil or water conservation or drainage district incurs expenses for soil or water conservation and levies an assessment against the farmers who benefit from the expenses. College student filing taxes You can deduct as a conservation expense amounts you pay or incur for the part of an assessment that: Covers expenses you could deduct if you had paid them directly, or Covers expenses for depreciable property used in the district's business. College student filing taxes Assessment for Depreciable Property You generally can deduct as a conservation expense amounts you pay or incur for the part of a conservation or drainage district assessment that covers expenses for depreciable property. College student filing taxes This includes items such as pumps, locks, concrete structures (including dams and weir gates), draglines, and similar equipment. College student filing taxes The depreciable property must be used in the district's soil and water conservation activities. College student filing taxes However, the following limits apply to these assessments. College student filing taxes The total assessment limit. College student filing taxes The yearly assessment limit. College student filing taxes After you apply these limits, the amount you can deduct is added to your other conservation expenses for the year. College student filing taxes The total for these expenses is then subject to the 25% of gross income from farming limit on the deduction, discussed later. College student filing taxes See Table 5-1 for a brief summary of these limits. College student filing taxes Table 5-1. College student filing taxes Limits on Deducting an Assessment by a Conservation District for Depreciable Property Total Limit on Deduction for Assessment for Depreciable Property Yearly Limit on Deduction for Assessment for Depreciable Property Yearly Limit for All Conservation Expenses 10% of: $500 + 10% of: 25% of: Total assessment against all members of the district for the property. College student filing taxes Your deductible share of the cost to the district for the property. College student filing taxes Your gross income from farming. College student filing taxes No one taxpayer can deduct more than 10% of the total assessment. College student filing taxes Any amount over 10% is a capital expense and is added to the basis of your land. College student filing taxes If an assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. College student filing taxes If the amount you pay or incur for any year is more than the limit, you can deduct for that year only 10% of your deductible share of the cost. College student filing taxes You can deduct the remainder in equal amounts over the next 9 tax years. College student filing taxes Limit for all conservation expenses, including assessments for depreciable property. College student filing taxes Amounts greater than 25% can be carried to the following year and added to that year's expenses. College student filing taxes The total is then subject to the 25% of gross income from farming limit in that year. College student filing taxes To ensure your deduction is within the deduction limits, keep records to show the following. College student filing taxes The total assessment against all members of the district for the depreciable property. College student filing taxes Your deductible share of the cost to the district for the depreciable property. College student filing taxes Your gross income from farming. College student filing taxes Total assessment limit. College student filing taxes   You cannot deduct more than 10% of the total amount assessed to all members of the conservation or drainage district for the depreciable property. College student filing taxes This applies whether you pay the assessment in one payment or in installments. College student filing taxes If your assessment is more than 10% of the total amount assessed, both the following rules apply. College student filing taxes The amount over 10% is a capital expense and is added to the basis of your land. College student filing taxes If the assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. College student filing taxes Yearly assessment limit. College student filing taxes   The maximum amount you can deduct in any one year is the total of 10% of your deductible share of the cost as explained earlier, plus $500. College student filing taxes If the amount you pay or incur is equal to or less than the maximum amount, you can deduct it in the year it is paid or incurred. College student filing taxes If the amount you pay or incur is more, you can deduct in that year only 10% of your deductible share of the cost. College student filing taxes You can deduct the remainder in equal amounts over the next 9 tax years. College student filing taxes Your total conservation expense deduction for each year is also subject to the 25% of gross income from farming limit on the deduction, discussed later. College student filing taxes Example 1. College student filing taxes This year, the soil conservation district levies and you pay an assessment of $2,400 against your farm. College student filing taxes Of the assessment, $1,500 is for digging drainage ditches. College student filing taxes You can deduct this part as a soil or conservation expense as if you had paid it directly. College student filing taxes The remaining $900 is for depreciable equipment to be used in the district's irrigation activities. College student filing taxes The total amount assessed by the district against all its members for the depreciable equipment is $7,000. College student filing taxes The total amount you can deduct for the depreciable equipment is limited to 10% of the total amount assessed by the district against all its members for depreciable equipment, or $700. College student filing taxes The $200 excess ($900 − $700) is a capital expense you must add to the basis of your farm. College student filing taxes To figure the maximum amount you can deduct for the depreciable equipment this year, multiply your deductible share of the total assessment ($700) by 10%. College student filing taxes Add $500 to the result for a total of $570. College student filing taxes Your deductible share, $700, is greater than the maximum amount deductible in one year, so you can deduct only $70 of the amount you paid or incurred for depreciable property this year (10% of $700). College student filing taxes You can deduct the balance at the rate of $70 a year over the next 9 years. College student filing taxes You add $70 to the $1,500 portion of the assessment for drainage ditches. College student filing taxes You can deduct $1,570 of the $2,400 assessment as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed later. College student filing taxes Example 2. College student filing taxes Assume the same facts in Example 1 except that $1,850 of the $2,400 assessment is for digging drainage ditches and $550 is for depreciable equipment. College student filing taxes The total amount assessed by the district against all its members for depreciable equipment is $5,500. College student filing taxes The total amount you can deduct for the depreciable equipment is limited to 10% of this amount, or $550. College student filing taxes The maximum amount you can deduct this year for the depreciable equipment is $555 (10% of your deductible share of the total assessment, $55, plus $500). College student filing taxes Since your deductible share is less than the maximum amount deductible in one year, you can deduct the entire $550 this year. College student filing taxes You can deduct the entire assessment, $2,400, as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed below. College student filing taxes Sale or other disposal of land during 9-year period. College student filing taxes   If you dispose of the land during the 9-year period for deducting conservation expenses subject to the yearly limit, any amounts you have not yet deducted because of this limit are added to the basis of the property. College student filing taxes Death of farmer during 9-year period. College student filing taxes   If a farmer dies during the 9-year period, any remaining amounts not yet deducted are deducted in the year of death. College student filing taxes 25% Limit on Deduction The total deduction for conservation expenses in any tax year is limited to 25% of your gross income from farming for the year. College student filing taxes Gross income from farming. College student filing taxes   Gross income from farming is the income you derive in the business of farming from the production of crops, fish, fruits, other agricultural products, or livestock. College student filing taxes Gains from sales of draft, breeding, or dairy livestock are included. College student filing taxes Gains from sales of assets such as farm machinery, or from the disposition of land, are not included. College student filing taxes Carryover of deduction. College student filing taxes   If your deductible conservation expenses in any year are more than 25% of your gross income from farming for that year, you can carry the unused deduction over to later years. College student filing taxes However, the deduction in any later year is limited to 25% of the gross income from farming for that year as well. College student filing taxes Example. College student filing taxes In 2012, you have gross income of $32,000 from two farms. College student filing taxes During the year, you incurred $10,000 of deductible soil and water conservation expenses for one of the farms. College student filing taxes However, your deduction is limited to 25% of $32,000, or $8,000. College student filing taxes The $2,000 excess ($10,000 − $8,000) is carried over to 2013 and added to deductible soil and water conservation expenses made in that year. College student filing taxes The total of the 2012 carryover plus 2013 expenses is deductible in 2013, subject to the limit of 25% of your gross income from farming in 2013. College student filing taxes Any expenses over the limit in that year are carried to 2014 and later years. College student filing taxes Net operating loss. College student filing taxes   The deduction for soil and water conservation expenses, after applying the 25% limit, is included when figuring a net operating loss (NOL) for the year. College student filing taxes If the NOL is carried to another year, the soil and water conservation deduction included in the NOL is not subject to the 25% limit in the year to which it is carried. College student filing taxes When to Deduct or Capitalize If you choose to deduct soil and water conservation expenses, you must deduct the total allowable amount on your tax return for the first year you pay or incur these expenses. College student filing taxes If you do not choose to deduct the expenses, you must capitalize them. College student filing taxes Change of method. College student filing taxes   If you want to change your method for the treatment of soil and water conservation expenses, or you want to treat the expenses for a particular project or a single farm in a different manner, you must get the approval of the IRS. College student filing taxes To get this approval, submit a written request by the due date of your return for the first tax year you want the new method to apply. College student filing taxes You or your authorized representative must sign the request. College student filing taxes   The request must include the following information. College student filing taxes Your name and address. College student filing taxes The first tax year the method or change of method is to apply. College student filing taxes Whether the method or change of method applies to all your soil and water conservation expenses or only to those for a particular project or farm. College student filing taxes If the method or change of method does not apply to all your expenses, identify the project or farm to which the expenses apply. College student filing taxes The total expenses you paid or incurred in the first tax year the method or change of method is to apply. College student filing taxes A statement that you will account separately in your books for the expenses to which this method or change of method relates. College student filing taxes Send your request to the following  address. College student filing taxes  Department of the Treasury Internal Revenue Service Center Cincinnati, OH 45999  For more information, see Change in  Accounting Method in chapter 2. College student filing taxes Sale of a Farm If you sell your farm, you cannot adjust the basis of the land at the time of the sale for any unused carryover of soil and water conservation expenses (except for deductions of assessments for depreciable property, discussed earlier). College student filing taxes However, if you acquire another farm and return to the business of farming, you can start taking deductions again for the unused carryovers. College student filing taxes Gain on sale of farmland. College student filing taxes   If you held the land 5 years or less before you sold it, gain on the sale of the land is treated as ordinary income up to the amount you previously deducted for soil and water conservation expenses. College student filing taxes If you held the land less than 10 but more than 5 years, the gain is treated as ordinary income up to a specified percentage of the previous deductions. College student filing taxes See Section 1252 property under Other Gains in chapter 9. College student filing taxes Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

IRS Releases the Dirty Dozen Tax Scams for 2013

IRS YouTube Video
Dirty Dozen: English | Spanish | ASL

IR-2013-33, March 26, 2013

WASHINGTON — The Internal Revenue Service today issued its annual “Dirty Dozen” list of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.

The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.

"This tax season, the IRS has stepped up its efforts to protect taxpayers from a wide range of schemes, including moving aggressively to combat identity theft and refund fraud," said IRS Acting Commissioner Steven T. Miller. "The Dirty Dozen list shows that scams come in many forms during filing season. Don't let a scam artist steal from you or talk you into doing something you will regret later."

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

The following are the Dirty Dozen tax scams for 2013:

Identity Theft

Tax fraud through the use of identity theft tops this year’s Dirty Dozen list. Identity theft occurs when someone uses your personal information such as your name, Social Security number (SSN) or other identifying information, without your permission, to commit fraud or other crimes. In many cases, an identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund.

Combating identity theft and refund fraud is a top priority for the IRS, and we are taking special steps to assist victims. For the 2013 tax season, the IRS has put in place a number of additional steps to prevent identity theft and detect refund fraud before it occurs. We have dramatically enhanced our systems, and we are committed to continuing to improve our prevention, detection and assistance efforts.

The IRS has a comprehensive and aggressive identity theft strategy employing a three-pronged effort focusing on fraud prevention, early detection and victim assistance. We are continually reviewing our processes and policies to ensure that we are doing everything possible to minimize identity theft incidents, to help those victimized by it and to investigate those who are committing the crimes.

The IRS continues to increase its efforts against refund fraud, which includes identity theft. During 2012, the IRS prevented the issuance of $20 billion of fraudulent refunds, including those related to identity theft, compared with $14 billion in 2011.

This January, the IRS also conducted a coordinated and highly successful identity theft enforcement sweep. The coast-to-coast effort against identity theft suspects led to 734 enforcement actions in January, including 298 indictments, informations, complaints and arrests. The effort comes on top of a growing identity theft effort that led to 2,400 other enforcement actions against identity thieves during fiscal year 2012. The Criminal Investigation unit has devoted more than 500,000 staff-hours to fighting this issue.

We know identity theft is a frustrating and complex process for victims. The IRS has 3,000 people working on identity theft related cases — more than double the number in late 2011. And we have trained 35,000 employees who work with taxpayers to help with identity theft situations.

The IRS has a special section on IRS.gov dedicated to identity theft issues, including YouTube videos, tips for taxpayers and an assistance guide. For victims, the information includes how to contact the IRS Identity Protection Specialized Unit. For other taxpayers, there are tips on how taxpayers can protect themselves against identity theft.

Taxpayers who believe they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. Taxpayers can call the IRS Identity Protection Specialized Unit at 800-908-4490. More information can be found on the special identity protection page.

Phishing

Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. Armed with this information, a criminal can commit identity theft or financial theft.

If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov.

It is important to keep in mind the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information that can help you protect yourself from email scams.

Return Preparer Fraud

About 60 percent of taxpayers will use tax professionals this year to prepare their tax returns. Most return preparers provide honest service to their clients. But some unscrupulous preparers prey on unsuspecting taxpayers, and the result can be refund fraud or identity theft.

It is important to choose carefully when hiring an individual or firm to prepare your return. This year, the IRS wants to remind all taxpayers that they should use only preparers who sign the returns they prepare and enter their IRS Preparer Tax Identification Numbers (PTINs).

The IRS also has created a new web page to assist taxpayers. For tips about choosing a preparer, red flags, details on preparer qualifications and information on how and when to make a complaint, visit www.irs.gov/chooseataxpro.

Remember: Taxpayers are legally responsible for what’s on their tax return even if it is prepared by someone else. Make sure the preparer you hire is up to the task.

IRS.gov has general information on reporting tax fraud. More specifically, report abusive tax preparers to the IRS on Form 14157, Complaint: Tax Return Preparer. Download Form 14157 and fill it out or order by mail at 800-TAX FORM (800-829-3676). The form includes a return address.

Hiding Income Offshore

Over the years, numerous individuals have been identified as evading U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities, using debit cards, credit cards or wire transfers to access the funds. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.

The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as the banks and bankers suspected of helping clients hide their assets overseas. The IRS works closely with the Department of Justice (DOJ) to prosecute tax evasion cases.

While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting and disclosure requirements are breaking the law and risk significant penalties and fines, as well as the possibility of criminal prosecution.

Since 2009, 38,000 individuals have come forward voluntarily to disclose their foreign financial accounts, taking advantage of special opportunities to comply with the U.S. tax system and resolve their tax obligations. And, with new foreign account reporting requirements being phased in over the next few years, hiding income offshore will become increasingly more difficult.

At the beginning of 2012, the IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The IRS continues working on a wide range of international tax issues and follows ongoing efforts with DOJ to pursue criminal prosecution of international tax evasion. This program will be open for an indefinite period until otherwise announced.

The IRS has collected $5.5 billion so far from people who participated in offshore voluntary disclosure programs since 2009.

“Free Money” from the IRS & Tax Scams Involving Social Security

Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file a tax return with little or no documentation, have been appearing in community churches around the country. These schemes promise refunds to people who have little or no income and normally don’t have a tax filing requirement – and are also often spread by word of mouth as unsuspecting and well-intentioned people tell their friends and relatives.

Scammers prey on low income individuals and the elderly and members of church congregations with bogus promises of free money. They build false hopes and charge people good money for bad advice including encouraging taxpayers to make fictitious claims for refunds or rebates based on false statements of entitlement to tax credits. For example, some promoters claim they can obtain for their victims, often senior citizens, a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit, even if the victim was not enrolled in or paying for college. Con artists also falsely claim that refunds are available even if the victim went to school decades ago. In the end, the victims discover their claims are rejected. Meanwhile, the promoters are long gone. The IRS warns all taxpayers to remain vigilant.

There are also a number of tax scams involving Social Security. For example, scammers have been known to lure the unsuspecting with promises of non-existent Social Security refunds or rebates. In another situation, a taxpayer may really be due a credit or refund but uses inflated information to complete the return.

Beware: Intentional mistakes of this kind can result in a $5,000 penalty.

Impersonation of Charitable Organizations

Another long-standing type of abuse or fraud is scams that occur in the wake of significant natural disasters.

Following major disasters, it’s common for scam artists to impersonate charities to get money or private information from well-intentioned taxpayers. Scam artists can use a variety of tactics. Some scammers operating bogus charities may contact people by telephone or email to solicit money or financial information. They may even directly contact disaster victims and claim to be working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds.

They may attempt to get personal financial information or Social Security numbers that can be used to steal the victims’ identities or financial resources. Bogus websites may solicit funds for disaster victims. As in the case of a recent disaster, Hurricane Sandy, the IRS cautions both victims of natural disasters and people wishing to make charitable donations to avoid scam artists by following these tips:

  • To help disaster victims, donate to recognized charities.
  • Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. IRS.gov has a search feature, Exempt Organizations Select Check, which allows people to find legitimate, qualified charities to which donations may be tax-deductible.
  • Don’t give out personal financial information, such as Social Security numbers or credit card and bank account numbers and passwords, to anyone who solicits  a contribution from you. Scam artists may use this information to steal your identity and money.
  • Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.

Call the IRS toll-free disaster assistance telephone number (1-866-562-5227) if you are a disaster victim with specific questions about tax relief or disaster related tax issues.

False/Inflated Income and Expenses

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.

False Form 1099 Refund Claims

In some cases, individuals have made refund claims based on the bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS. In this ongoing scam, the perpetrator files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return.

Don’t fall prey to people who encourage you to claim deductions or credits to which you are not entitled or willingly allow others to use your information to file false returns. If you are a party to such schemes, you could be liable for financial penalties or even face criminal prosecution.

Frivolous Arguments

Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. The IRS has a list of frivolous tax arguments that taxpayers should avoid. These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law.

Falsely Claiming Zero Wages

Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer may also submit a statement rebutting wages and taxes reported by a payer to the IRS.

Sometimes, fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any variations of this scheme. Filing this type of return may result in a $5,000 penalty.

Disguised Corporate Ownership

Third parties are improperly used to request employer identification numbers and form corporations that obscure the true ownership of the business.

These entities can be used to underreport income, claim fictitious deductions, avoid filing tax returns, participate in listed transactions and facilitate money laundering and financial crimes. The IRS is working with state authorities to identify these entities and bring the owners into compliance with the law.

Misuse of Trusts

For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. While there are legitimate uses of trusts in tax and estate planning, some highly questionable transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the tax benefits promised and are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS.

IRS personnel have seen an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering a trust arrangement.
 

Follow the IRS on New Media
Subscribe to IRS Newswire

Page Last Reviewed or Updated: 07-Mar-2014

The College Student Filing Taxes

College student filing taxes Index A Adjusted basis Worksheet 1 to figure, Worksheet A Instructions. College student filing taxes Assistance (see Tax help) F Free tax services, How To Get Tax Help H Help (see Tax help) M More information (see Tax help) P Publications (see Tax help) T Tax help, How To Get Tax Help Taxpayer Advocate, Taxpayer Advocate Service. College student filing taxes TTY/TDD information, How To Get Tax Help W Worksheets Adjusted basis (Worksheet 1), Worksheet A Instructions. College student filing taxes Prev  Up     Home   More Online Publications