The IRS issued its annual “Dirty Dozen” list of tax scams, reminding taxpayers to protect themselves from a range of schemes that appear during filing season as individuals prepare their tax returns. Identity theft tops the list and the IRS is taking special steps to help victims of identity theft and refund fraud. The IRS focuses on fraud prevention, early detection and victim assistance, and it is reviewing its processes to investigate those who are committing the crimes. In addition, the IRS has a special section on identity theft on its website, including how to report identity theft to the IRS.
Other tax scams include phishing, return preparer fraud, evasion of U.S. taxes by hiding income in offshore banks, scams involving Social Security, impersonation of charitable organizations, falsifying or inflating income and expenses, frivolous arguments, disguising corporate ownership and the misuse of trusts. Many of the schemes have been long-standing, and taxpayers are advised on how to protect themselves from the increased use of these tax scams.