The IRS' Dirty Dozen List

My favorite time of the year is upon us (insert SERIOUS sarcasm here)! It’s tax time … time for Lady Liberty and Uncle Sam costumed figures to dance on the sidewalks, and unfortunately, time for con artists to try to bilk many of us out of a substantial sum of money.

Tax scams are on the rise and criminals are looking for increasingly sophisticated ways to defraud taxpayers and breach the tax system. The IRS has seen an approximate 400% surge in phishing and malware incidents so far this tax season. According to the IRS, emails designed to trick taxpayers into thinking they are official communications from the IRS or others in the tax industry, including tax software companies, are being circulated. Similarly, phishing schemes are also being seen and can ask taxpayers about a wide range of topics. Emails can seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information. Variations of these scams can also be seen via text messages. Additionally, fraudsters are asking for personal tax information, which could then be used to file false tax returns.

When taxpayers click on the fraudulent email links, they are taken to sites designed to imitate an official-looking website, such as the IRS site. The sites ask for Social Security numbers and other personal information. The sites may also carry malware, which can infect computers and allow criminals to access files or track keystrokes to gain information stores on the computer.

According to the IRS, they generally do not initiate contact with taxpayers via email to request personal or financial information. This includes any type of electronic communication, such as text messages or social media.

During the past year, as part of the Security Summit initiative, the IRS partnered with states and the tax industry to enhance coordination and create a more secure system for taxpayers. In that vein, the IRS has released its Dirty Dozen list that highlights twelve of the top scams that taxpayers should be aware of. Below are six of the items on the list:

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 careful and do everything they can to avoid being victimized. (IR-2016-12)

PHONE SCAM: 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. (IR-2016-14)

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. (IR-2016-15)

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. Legitimate tax professionals are a vital part of the U.S. tax system. (IR-2016-16)

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. Scam artists use flyers, advertisements, phony store fronts and word of mouth via community groups where trust is high to find victims. (IR-2016-18)

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. (IR-2016-20)

A complete list of the “Dirty Dozen” List of Tax Scams for 2016 can be found at https://www.irs.gov/uac/Newsroom/IRS-Wraps-Up-the-Dirty-Dozen-List-of-Tax-Scams-for-2016. Additional information about tax scams is available on IRS social media sites, including YouTube http://www.youtube.com/irsvideos and Tumblr http://internalrevenueservice.tumblr.com where people can search “scam” to find all the scam-related posts.

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