IRS releases ‘dirty dozen’ tax scams for 2012

Patty from the IRS says don't fall for the 'Dirty Dozen.'

IRS releases ‘dirty dozen’ tax scams for 2012

The Internal Revenue Service issued its annual “Dirty Dozen” ranking of tax scams this month, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.

The listing, compiled by the IRS each year, outlines a variety of common scams taxpayers might encounter during the year, though most schemes peak as people prepare their tax returns.

“Scam artists will tempt people in person, online and by e-mail with misleading promises about lost refunds and free money,” IRS Commissioner Doug Shulman said. “Don’t be fooled by these scams.”

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. The IRS Criminal Investigation Division works closely with the Department of Justice to shutdown scams and prosecute the criminals behind them.

Here are the Dirty Dozen tax scams for 2012:

Identity Theft

The IRS has embarked on a comprehensive strategy focused on preventing, detecting and resolving identity theft cases as soon as possible, working to spot false tax returns before refunds are issued.

The IRS is increasingly seeing identity thieves looking for ways to use a legitimate taxpayer’s identity and personal information to file a tax return and claim a fraudulent refund.

An IRS notice informing a taxpayer that more than one return was filed in the taxpayer’s name or that the taxpayer received wages from an unknown employer may be the first tip the individual receives that he or she has been victimized.

Anyone who believes his or her personal information has been stolen and used for tax purposes should immediately contact the IRS Identity Protection Specialized Unit.  For more information, visit the special identity theft page at irs.gov/identitytheft.

Phishing

Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. Armed with this information, a criminal can commit identity theft or financial theft.

If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to 

phishing@irs.gov

.

It is important to keep in mind the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

Return Preparer Fraud

About 60 percent of taxpayers will use tax professionals this year to prepare and file their tax returns. Most return preparers provide honest service to their clients. But as in any other business, there are also some who prey on unsuspecting taxpayers.

Questionable return preparers have been known to skim off their clients’ refunds, charge inflated fees for return preparation services and attract new clients by promising guaranteed or inflated refunds. Taxpayers should choose carefully when hiring a tax preparer. Federal courts have issued hundreds of injunctions ordering individuals to cease preparing returns, and the Department of Justice has pending complaints against many others.

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