An annual ritual of the IRS, Dirty Dozen is a list of possible tax scams that innocent taxpayers can easily fall prey to. This list becomes especially relevant during the tax season. The IRS modifies the said list every year, based on its findings through research on the prevalent scams in the market.
From simple refund scams to complicated tax shelter deals, this year’s list is a mix of possible tax offenses that may be committed by innocent taxpayers without any conscious participation on their part. They were released over 12 weeks in the form of various news reports.
To help you stay safe during the return filing process this season, we present to you a curated list of the infamous Dirty Dozen for the year 2019 –
Tax phishing scams are usually aimed at getting innocent taxpayers to reveal sensitive and personal details in lieu of an inquiry on the IRS’ behalf.
It is vital to remember that the IRS never initiates contact with taxpayers using email about a tax bill or refund related queries. Thus, you need to look out for potential fake emails and report them accordingly. Also, under no circumstances should you ever share your personal and financial details via email or click on suspicious links which claim to be from the IRS.
- Phone Scams
Fake calls from fraudulent criminals claiming to be IRS agents continues to be a menace. They often threaten taxpayers with jail time, deportation, and even license revocation. Taxpayers need to be very, very careful if they receive such calls and should do everything in their power to ensure the authenticity of such calls.
- Identity Theft
Fraudulent tax submissions using stolen social security details is one of the most common tax scams prevalent, not just during the tax season, but all year long. The IRS has taken a number of steps in conjunction with the Security Summit partnership of state tax agencies and the tax industry, to prevent such incidents from happening.
However, taxpayers are continually reminded of the possible implications of such identity theft.
- Return Preparer Fraud
The IRS has time and again warned taxpayers to be on the lookout for fraudulent tax preparers. With the ever-changing tax laws and a host of tax reforms introduced each year, it is not surprising that most people prefer to hire professionals to prepare and file their returns.
The IRS recognizes the contribution of honest tax professionals towards the US economy while still warning the taxpayers about the repercussions of hiring a fraudulent professional.
From refunds fraud to identity theft, this small minority of tax professionals stand to cause a lot of distress to innocent taxpayers.
- Inflated Refund Claims
Anyone offering an inflated rate of refund should always raise a red flag in the minds of taxpayers. Programs asking for their signature on a blank return or making aggregate refund promises even before they have a chance to inspect the required documents is a very obvious sign of foul play.
- Falsifying documents to claim refunds and credits
Often fraudulent professionals will convince a taxpayer to invent or modify income details to enhance their chances of receiving tax credits and refunds, along with additional benefits.
This type of behavior should be immediately reported!
Falsifying documents can result in severe penalties being imposed on the taxpayer, thus leading to an enlarged tax bill.
Thus, instead of helping you decrease your tax liability, such a move will land you with bigger problems with the IRS.
For the rest of an infamous lot of scams to watch out for this year, watch out this space. We will soon be publishing dirt on the remaining 6 scams.
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