Spot the Dirty Dozen Tax Scams

The IRS has issued its annual list of the “Dirty Dozen” tax scams.

  • Strategy: Try to avoid these items. They can land you in hot tax water. Here’s a round-up.
  • Phishing: Watch out for potential fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about a bill or tax refund.
  • Phone Scams: Phone calls from criminals, impersonating IRS agents remain a threat. They may threaten taxpayers with police arrest, deportation and license revocation, among other things.
  • Identity theft: Be alert to tactics aimed at stealing your identity. The IRS continues to pursue criminals filing fraudulent tax returns with someone else’s social security number.
  • Return Preparer Fraud: Look out for unscrupulous return preparers. Caveat: The vast majority of tax professionals provide honest high quality service.
  • Fake Charities: Groups masquerading as charitable organizations solicit donations from unsuspecting contributors. Be wary of charities with names similar to familiar or nationally known organizations.
  • Inflated Refund Claims: Take note of anyone promising inflated tax refunds. To find victims, fraudsters may use flyers, phone storefronts or word of mouth via community groups where trust is high.
  • Excessive Claims for Business Credits: Don’t improperly claim the fuel tax credit, a tax benefit generally not available to most taxpayers. Avoid misuse of the research credit.
  • Falsely Padding Deductions on Returns: Taxpayers should avoid the temptation to falsely inflate deductions or expenses on their tax returns. Think twice before doing this.
  • Falsifying Income to Claim Credits: Con artists may convince unsuspecting taxpayers to invent income to erroneously qualify for tax credits, such as the earned income tax credit.
  • Frivolous Tax Arguments: Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims about the legality of paying tax. The penalty for filing a frivolous tax return is 5,000.
  • Abusive Tax Shelters: Abusive tax structures are sometimes used to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes.
  • Offshore Tax Avoidance: People involved in offshore tax avoidance are best served by voluntarily getting caught up on their tax-filing responsibilities.

Tip: For more information, visit, www.irs.gov