April 15 Deadline for Filing Tax Returns

As the April 15 deadline for filing tax returns approaches, authorities are reminding people to steer clear of scams that could land them in jail.

Just because someone else prepares your tax return and, for example, lists fake deductions or hides income doesn't mean you are off the hook, said Internal Revenue Service. If the return has your name on it, you are ultimately responsible for what it contains.

One of the most common scams involves tax preparers who promise return checks to their customers that are too good to be true. The problem in these cases is that preparers may make false deductions or use other illegal practices to push up the amount the customer will get back from the government. The preparers make their money by charging exorbitant fees or skimming money from the refund.

"Taxpayers should be wary of anyone peddling scams that seem too good to be true."

People should also be aware of phishing scams. In these cases crooks use e-mail, Tweets or realistic-looking but fake Web sites. Scammers will try to mislead people by telling them they are entitled to a tax refund and that they must reveal personal information to claim it. Crooks then use that information to set up bank accounts, get credit cards or take out loans.
Some of the other scams that surface around tax time are:

• Zero wages: In this scam a person files a Form 4852 in order to reduce his taxable income to zero. Filing this kind of return could mean a fine of up to $5,000.
• Filing misleading forms: This fraud involves claiming a tax credit or asking for a refund on taxes someone hasn't paid. The Form 1099 Original Issue Discount is sometimes used in this scheme.
• Retirement plans: People should be wary of advisers who encourage them to put assets into individual retirement accounts at an amount less than fair market value. This is a way to get around yearly contribution limits and is illegal.