Each year the IRS announces “Dirty Dozen Tax Scams” they encounter regarding frivolous tax arguments and fraud. While six of the “scams” are related to, “don’t cheat we have our eyes on you,” the other six are scams that all of us should be on guard to detect. Here are the largest three scams:
Identity theft – Identity theft tops the list of the dirty dozen this year. This reflects a truly bad year for the IRS. The IRS has acknowledged the theft of taxpayer’s private information three times in the past eighteen months. Thankfully, the IRS is taking precautionary measures to curtail this huge problem. For example, they are limiting the number of direct deposits it will make to any single account, working with states and tax preparation software vendors to put more controls in place, delaying the early processing of tax refunds, internal tracking within software programs, and continual checking for heavy filing activity. Some states will even be requiring driver’s license numbers on their tax forms. For people who have already had identity problems, there are taxpayer single use tax ID’s that change every year. If you wish to know more, here is a link to the IRS identity protection page: IRS Identity Protection: Prevention, Detection and Victim Assistance
Phone scams – Phone calls from thieves representing themselves as IRS agents continue to get more sophisticated. These thieves often have some personal information, the caller ID may show as coming from the IRS and the scam may involve numerous phone calls instead of a single contact. Some are even automated phone calls! Threats range from arrest warrants to deportation to law suits. Remember, never give information over the phone to someone claiming to be from the IRS when they call.
Phishing – This recurring scam involves receiving fake emails and creating websites that look like the real deal. The IRS will not send you billing information or refund information via email. Do not click on any link from an email received from the IRS unless you requested it. Remember the IRS does not initiate contact through emails.
Look for the second part of this article next week for more info!