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Putting your money in sound investments is a financially savvy thing to do. It offers the opportunity for growth and protection and allows your money to work for you. While there are lots of honest investment opportunities out there, thousands of fraudulent investments are pushed by unscrupulous brokers and malicious perpetrators.

Common Types of Investment Fraud

Investment fraud comes in a number of forms and guises. Some of the most common include:

• Ponzi schemes: The prototypical investment fraud is the Ponzi scheme. Named after Charles Ponzi, who duped thousands of people into investing in a postage stamp scheme in the 1920s, this type of fraud pays investors with funds collected from newer investors. The organizers recruit investors by claiming they will invest money into high return accounts, but instead keep the money for themselves and use the funds of new recruits to pay existing investors. Ponzi schemes are characterized by high return-no risk investments that produce strangely consistent returns from unregistered investments. They usually collapse when new investors cannot be attracted.

• Pyramid schemes: Much like Ponzi schemes, pyramid schemes make money by continually recruiting new participants. While the organization may attempt to disguise itself as a multi-level marketing program, fraudsters use new money to pay off existing investors. Pyramid schemes differ from Ponzi schemes in that they boast an actual product or service and may charge recurring member fees or payments.

• Pump and Dump schemes: Pump and dump schemes are becoming increasingly popular and refer to situations wherein promoters attempt to boost the price of a stock with false information and misleading statements. Once the price is successfully increased to the desired level, the fraudsters sell their holdings and earn a tidy profit. By dumping their shares, the stock price then drops and causes victims to lose the value of their investments.

• Advance fee fraud: Some fraudulent investments will ask investors for an upfront fee, payment, or commission for the right to invest funds at a later date. Typically, these schemes target investors with underperforming assets and offer to let them “off the hook” if they pay an advance fee.

• Microcap fraud: When dealing with microcap stocks or penny stocks, it’s important to find accurate information. Many of these companies, however, don’t file reports with the SEC. This allows fraudsters to produce false and misleading information. They usually disseminate information through email spam, paid promoters, and internet message boards.

• And more. While these are some of the most common forms, there are dozens of other scams, including affinity fraud, high yield investment programs, pre-IPO scams, promissory note scams, and “prime bank” investments.

What to do if You’ve Been Defrauded

While prevention is the best defense mechanism against investment fraud, it’s far too easy to fall into a hidden trap. When it’s too late to avoid a fraudulent investment – but you’re aware that it’s illegitimate – you can still take action. Some of the steps you’ll need to pursue include:

• Put it in writing: The first step is to put your complaint in writing with the broker, firm, or organization you believe has defrauded you. This serves two purposes: (1) your accusation will demand a response; and (2) your complaint will start a paper trail for future reference.

• Contact appropriate resources: Next, you’ll want to find the appropriate regulatory body and contact them directly. This may be the Securities and Exchange Commission, State Securities Regulator, National Association of Securities Dealers, Federal Bureau of Investigation, Better Business Bureau, local district attorney, or local Postal Inspector’s Office. These resources have the authority to conduct in-depth reviews and will accelerate the process. For best results, provide them with concrete and factual evidence of the fraudulent activity you believe has occurred.

• Find representation: At some point in the process, it will help to find some representation. Victims of investment fraud may be eligible to recover a portion of their losses through tax deductions. This could affect how you proceed. According to Section 165 of the Federal Tax Code, taxpayers are eligible for reimbursement for losses incurred in the same tax year. To investigate this possibility, you will need the services of a tax resolution specialist.

Investment fraud can be gut-wrenching and painful for victims, but the good news is that there is hope and all is not lost. Instead of lashing out and taking drastic measures, you can better address the issues by taking a calculated approach. You may even find that you’re able to recover some of your losses and regain financial peace of mind.

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This country was built on the principles of life, liberty, and the pursuit of happiness. With liberty squeezed between the other two building blocks, it can feel like it’s a forgotten thing sometimes. However, when it comes to access to your personal information, the government has gotten this one right. Through the FOIA, or Freedom of Information Act, you have the ability to access your IRS records at your request. But how exactly does it work, and what’s the value in doing so? Let’s take a look.

Who Can File a FOIA Request?

The beauty of the FOIA Act is that any taxpayer can fill out a freedom of information request form and obtain their personal IRS files. According to FOIA.gov, “The general rule is that any person – citizen or not – can make a FOIA request.” There are no specific forms or requirements, other than the request must be in writing and clearly explain the information sought. In writing means by mail, email, or fax. The IRS will require proof of identification to proceed.

What is an FOIA Request?

In general terms, an FOIA request can be made for a variety of different information held by the government. This includes criminal records, status complaints filed with the DHS Office, Alien Files, and tax returns. FIOA requests only apply to federal agencies and do not allow access to records held by state and local governments.

When Can You File an FOIA Request?

You can request IRS information under the FOIA at any time. While it may take some time to hear back or gain access to your records, nothing prohibits you from requesting information. As soon as you feel like there may be an issue with your taxes, it’s a good idea to fill out a freedom of information request form.

Where Can You File an FOIA Request?

Thanks to the 1996 amendment to the FOIA, it’s easier than ever to file a FOIA request form and access IRS tax information. This amendment requires federal agencies to make records available online and expedites the process of obtaining information. Your freedom of information request form must be written, which includes email, fax, and standard mail. When filing, you will want to identify the IRS office that will have the records you are looking for and direct your request there.

Why File a FOIA Request?

FOIA requests are filed for a number of different reasons. Taxpayers usually look for tax return information or examination files. This allows you to examine your files without signaling to the IRS that you are looking into anything.

FAQs Regarding IRS Freedom of Information Requests

Here are answers to popular questions regarding the FOIA:

• Who oversees the FOIA and who handles requests?

  The executive branch of government is responsible for the administration of the FOIA. The DOJ of Information Policy oversees compliance. No single office handles FOIA requests; rather, each federal agency processes its own records.

• How are FOIA requests actually processed?

  Because there is no central office for FOIA requests, the process can vary. Once an agency receives your request, they should send you a letter acknowledging receipt. They will also include a tracking number and request official identification documents.

• How long does the process take?

  The FOIA establishes the standard time limit at approximately one month. However, this response time will vary depending on the complexities and requirements of the request.

• How much do FOIA requests cost?

  There are typically no fees for FOIA requests, but some instances do call for small payments. The first two hours of a search – or first 100 pages of duplication – are free of charge. However, if the processing is estimated to exceed $25, fees may be required.

Sample FOIA Request Letters

The National Freedom of Information Coalition has done a fantastic job of providing sample FOIA request letters for the general public to view. These letters are organized by type and state.

The Value in IRS FOIA Request Letters

While many individuals never have the need to file a FOIA request letter, it’s an extremely valuable tool for those that do. It enables you to find the information you are looking for without raising red flags of suspicion. To make the most out of your request letter, be sure to follow the rules and guidelines laid out by all involved parties.

America was founded on freedom, so make sure you seize every opportunity afforded to you. Whether you believe you may be in trouble or are simply curious, the FOIA enables you to access your records and have peace of mind.