THE 2018 IRS DIRTY DOZEN TAX SCAMS
And the “Winners” are…
Caution! Fraudsters at Work
“We continue to work hard to protect taxpayers from identity theft and other scams,” said IRS Commissioner John Koskinen. “Taxpayers can and should stay alert to new schemes which seem to constantly evolve. We urge them to do all they can to avoid these pitfalls – whether old or new.”
For the fourth year, the service again offers its Dirty Dozen scams including some old, some new and a few either wily or routine. What follows is a recap of the top 12 nasty ploys that the bad guys use to steal taxpayers personal information, scam them out of money or talk them into engaging in questionable (even illegal!) behavior with their taxes.
Thanks to the IRS, you can view a video version of this story Dirty Dozen – English, or just read on!
- Phishing: Taxpayers need to be on guard against fake emails or websites looking to steal personal information. The IRS will never send taxpayers an email about a bill or refund out of the blue. Don’t click on one claiming to be from the IRS. Be wary of strange emails and websites that may be nothing more than scams to steal personal information
- Phone Scams: Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as scam artists threaten taxpayers with police arrest, deportation and license revocation, among other things.
- Identity Theft: Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number. Though the agency is making progress on this front, taxpayers still need to be extremely cautious and do everything they can to avoid being victimized.
- Return Preparer Fraud: Be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest high-quality service. But there are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers.
- Fake Charities: Be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. Be wary of charities with names similar to familiar or nationally known organizations. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities. IRS.gov has the tools taxpayers need to check out the status of charitable organizations.
- Inflated Refund Claims: Taxpayers need to be on the lookout for anyone promising inflated refunds. Be wary of anyone who asks taxpayers to sign a blank return, promises a big refund before looking at their records, or charges fees based on a percentage of the refund.
- Excessive Claims for Business Credits: Avoid improperly claiming the fuel tax credit, as well as avoid misuse of the research credit.
- Falsely Padding Deductions on Returns: Taxpayers should avoid the temptation of falsely inflating deductions or expenses on their returns to under pay what they owe or possibly receive larger refunds.
- Falsifying Income to Claim Credits: Don’t 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 even though they are wrong and have been repeatedly thrown out of court. The penalty for filing a frivolous tax return is $5,000.
- Abusive Tax Shelters: The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them.
- Offshore Tax Avoidance: There have been a recent string of successful enforcement actions against offshore tax cheats. Taxpayers are best served by coming in voluntarily and getting caught up on their tax-filing responsibilities.
Taxpayers are encouraged to review the list in a special section on IRS.gov and be on the lookout for these con games.