Tax scams abound this time of year with numerous people falling prey to fraudulent offers and fraud. The IRS is making an effort to help people become informed and prevent these scams from ripping off taxpayers, stealing their money or even causing them to face stiff penalties, interest and even criminal prosecution. Remember, if it sounds too good to be true, it probably is.
Some highlights of this year’s update of the IRS’s annual “Dirt Dozen” list of tax scams include identity theft, topping out the list. In many cases, an identity thief uses a taxpayer’s identity to illegally file a tax return and claim a refund. For the 2014 filing season, the IRS has expanded efforts to better protect taxpayers and help victims.
Pervasive telephone scams were also highlighted, as the IRS has seen an increase in local phone scams across the country. Callers pretend to be from the IRS in hopes of stealing money or identities from victims. Phishing scams typically use unsolicited emails or fake websites that appear legitimate. Scammers lure in victims and prompt them to provide their personal and financial information.
False promises of “free money” from inflated refunds allow scam artists to pose as tax preparers during tax time, luring victims in by promising large tax refunds. The bottom line is that you are legally responsible for what’s on your tax return, even if someone else prepares it. Taxpayers who buy into such schemes can end up penalized for filing false claims or receiving fraudulent refunds.
A variety of other tricks employed by scammers were listed, including the impersonation of charitable organizations and frivolous arguments, schemes that encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe.
Tax scams can take many forms beyond the “Dirty Dozen.” The best defense is to remain vigilant. Get more information on tax scams at IRS.gov.