Every year, the IRS releases its annual “Dirty Dozen” list of tax scams. This is a list of the top 12 scams out there that the IRS cringes to hear about every year.
They identified the fraudulent acts and wrote up the list as a reference to help Americans tell the difference between liars and the real thing. Take a look at the top three they found and keep an eye out for them in your own life.
First, identity theft is abounding in the US. Applied to the IRS, people steal your personal identification information and file for a return in your name.
When completed successfully, they file taxes before you do and have a return on the way to their mailbox before you figure out what’s happened. Fraudulent refunds reach into the billions of dollars every year.
The IRS has become very good at stopping many of these cases from going through. They aren’t fool proof though.
The best way to avoid this is to be very protective with your identity. Hold onto personal information like your life depended on it.
Don’t easily hand over things like your social security number, birth date, or other identification number. Only give that information to companies that need to know it and you understand why they need it.
Be more conservative than you are liberal. Doubt the company before you believe in them.
Second is phishing. Phishing is when someone attempts to trick information out of you (and is hence a tool used in identity theft).
Phishing with taxes often shows up in the form of emails and websites. An email shows up in your inbox claiming to be from the IRS or some other similarly important tax agency telling you they need some information.
For your convenience, they ask you to hand over information like your social security number, financial numbers, and other sensitive information. They might even direct you to a website made to look like the IRS’s webpage.
Don’t follow those links. Don’t send that information in an email.
Should you ever receive a contact from the IRS, it would come in the form of a letter in the mail. You would never receive an email from them, nor would they ever ask you to send that information via email to them.
Nor should they need your personal identification information, providing they know who you are better than you do. If for some reason they do require something of you, they will send a letter in the mail.
When you receive these letters, give the IRS a call to verify that the document is real. Don’t fall to a phishing scam by not giving out your information.
Third and finally, dishonest return preparers will sometimes be a source of tax fraud. Choose someone honest, and well documented to prepare your tax returns this year.
These are the three most common forms of fraud the IRS is seeing this year. Watch out for them as the final days of the tax season come to a close.
The Tax Crisis Institute is an office of tax lawyers in LA. These LA tax attorneys specialize in helping clients manage and work with back taxes, wage levies, and other tax problems Americans come into problems with every year.