The Dirty Dozen is a compilation of common scams taxpayers may encounter during the coming tax year, its put together by the IRS annually. And I can personally vouch for its usefulness; you should definitely go through the list. Now, you could encounter a scam any time of the year, but you may want to remain extra vigilant during the time leading up to the filing season.
The scams mentioned in this list are considered quite illegal and usually lead to large sums of money in penalties and interest along with criminal prosecution. The IRS Criminal Investigation is known to work hand in hand with the Department of Justice (DOJ), in order to crack down hard on scam artists.
And without further ado, here are the first four of the infamous dirty dozen tax scams for the year 2015:
Some Important Facts You Should Know About the IRS
Top 4 ‘Dirty Dozen’ IRS Tax Scams Of 2015
1. Identity Theft Tax Scam!
2. Pervasive Telephone Tax Scams
3. Promises of ‘Free Money’ from Inflated Refunds Tax Scam
4. IRS Phishing Email Scam
Identity Theft Tax Scam!
The term refers to the act of using someone else’s personal information (like your name, Social Security number) without their knowledge and consent. An identity thief usually targets a legitimate taxpayer to fraudulently file for a tax return and claim the legitimate taxpayer’s refund.
There isn’t much you can do to counter an identity thief once they have their hands on your SSN. A word to the wise, don’t dole out such personal information to just anyone, and never giv it out to anyone over the phone. Better safe than sorry, right?
If you are looking for more information on how you can avoid identity theft, visit the IRS website. They have a specific section dedicated to the various details of identity theft the information includes ways in which taxpayers can avoid identity theft and the contact information for the IRS identity protection specialized unit.
For Further Reading: Taxpayer Guide to Identity Theft
If you think you are at risk of identity theft because of misplaced or stolen personal information, then contact the IRS at once. Time is of the utmost importance in such scams. This way the IRS can take precautions and secure your Tax account. You can the contact the IRS Identity Protection Specialized Unit at 800-908-4490. Fill out the IRS Identity Theft Affidavit, Form 14039.
Pervasive Telephone Tax Scams
The IRS has witnessed a sudden increase in local phone scams all across the nation, with callers claiming to be from the IRS in an attempt to steal money or personal information from their victims.
The phone scams are quite varied and can include anything from instances in which callers accuse the victims of owing the IRS large sums of money, to instances where they inform the victims that they are entitled to a large refund.
There have been cases( as narrated by a popular) in which the victims were threatened by an arrest or driver’s license revocation. These threats are then followed by calls that claim to be from the local police department or the state DMV.
There are certain characteristics to the calls; here is a small list of such things:
- The caller will use a common name (like John or Michael) which will then be followed by an IRS badge number (be sure to jot down the badge number).
- He/she will try to throw you off balance by reciting your SSN, or at least its last four digits.
- The call will imitate the IRS toll-free number caller ID in order to make it appear like the IRS is indeed calling.
- The calls may sometimes be accompanied by bogus IRS emails to victims to support the calls.
- There may be background noise of other calls being made just like a call site.
If you get a call from someone claiming to be the IRS, this is what you ought to do: If you do owe taxes or you think you might, call the IRS at 800-829-1040. The IRS employees there can help you with any payment issue – if there really is any sort of issue.
And if you’re certain you don’t not owe any taxes, then put down the call and immediately report it to the Treasury Inspector General for Tax Administration at 800-366-4484.
You should also contact the Federal trade commission by means of the ‘FTC Complaint Assistant’ on their website (FTC.gov). Be sure to add the phrase ‘IRS Telephone Scam’ in the comments of your complaint.
IRS Phishing Email Scam
This is a scam commonly carried out by means of an unsolicited email or a fake website which poses to be a legitimate site to lure in victims, it prompts them to provide essential personal and financial information. This kind of information can then be used by a criminal to commit identity or financial theft.
If you receive an unsolicited email which looks to be form the IRS or an organization linked to the IRS (like the Electronic Federal Tax Payment System), report it by forwarding the email to firstname.lastname@example.org.
It is important for you to remember that the IRS simply does not ask for Personal or financial information by means of e-mail or any other type of electronic communication, like text messages and social media channels. Visit the IRS website for more detailed information on Email Scams.
Samples of phishing email scams
First sample – actual IRS-related phishing e-mail – PDF
2nd Sample – IRS-related phishing e-mail – PDF
Is it a phishing website posing as the IRS? – PDF
Promises of ‘Free Money’ from Inflated Refunds Tax Scam
Many Scam artists pose as tax preparers during the tax filing season, they lure in their victims by promising large sums in federal tax refunds. Such ‘Tax preparers’ make use of flyers, advertisements, fake store fronts and word of mouth to set a wide trap for victims.
Some of them have even been known to spread word through social groups like community organizations or churches, targeting trustworthy and well established groups. The scammers tend to target people who don’t really have filing requirements (like low-income individuals and the elderly as well as a few non-English speakers).
They build false hope by tricking individuals into making claims for non-existent rebates, benefits and tax credits. They charge a large amount of money for terrible and harmful advice. There have been cases where the ‘Tax preparer’ file a false return in the victim’s name who never finds out that a refund actually was paid.
It is essential for you to remember that all taxpayers are legally responsible for what’s on their returns irrespective of who it was prepared by. Tax payers who go into such schemes usually end up being penalized for filing false claims.
Therefore you should be very careful when choosing a Tax attorney. Honest Tax/return preparers tend to ask for the following:
For Further Reading: How To Find A Professional Tax Attorney? – Complete Guide
– Proof of income
– Eligibility for credits and deductions
– Sign returns as the preparer
– IRS Preparer Tax Identification Number (PTIN).
And they are known to provide the taxpayer a copy of the return. A word to the wise: Intentional mistakes of this kind can result in penalties of $5000 or more.