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article imageIRS releases 'Dirty Dozen', top tax scams to watch out in 2012

By Leigh Goessl     Feb 18, 2012 in Lifestyle
Tax season is currently in full swing in the U.S. As the Jan. 31 deadline for people to receive their tax documents is passed, millions of Americans have either already filed and/or are in the process of preparing to do so by April's tax day.
For many, tax season is a pain. Whether a taxpayer takes on the, often tedious, paperwork alone, or pays money to a professional to deal with the filing, it's still a burden.
As if tax season wasn't wearing enough in terms of organization and actually filing, there are always numerous tax-related scams taxpayers have to be on the lookout for that, if snared, can cause extensive troubles and frustrations.
Every year the IRS releases its "Dirty Dozen," which is a list of tax scams afflicting citizens throughout the year, and the list for 2012 has been released. The IRS cautions that while many of the schemes "peak" during tax season, the scammers do commonly try to exploit throughout the year.
“Taxpayers should be careful and avoid falling into a trap with the Dirty Dozen,” said IRS Commissioner Doug Shulman in an IRS press release. “Scam artists will tempt people in-person, on-line and by e-mail with misleading promises about lost refunds and free money. Don’t be fooled by these scams.”
Not surprisingly, Identity Theft tops the list.
"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," said the press release. According to the tax agency, identity theft scams are one of the most complex scams the IRS deals with and, as a result, places a heavy commitment to detection of and resolution of tax-related identity theft cases. This includes a "robust screening process," that includes preventative measures to halt fraudulent tax returns.
The agency reported it protected over $1.4 billion of taxpayer monies from going to scammers last year.
Next on the list, also perhaps not surprisingly, is phishing. Phishing is one of the most common exploits nowadays and seeing it connected to taxes is not a big shocker. The IRS emphasizes the tax agency does not ask taxpayers by email to ask for personal or financial details, nor does it use social media avenues or text messaging. Consumers were asked in the statement to forward any suspected phishing attempts to This includes not only suspicious requests from a scammer posing as the IRS, but also tax-related entities, such as the Electronic Federal Tax Payment System (EFTPS).
Third on the list is Return Preparer Fraud. While many businesses are honest, there are always a few bad apples. The IRS gives advice on what to look for when hiring a tax preparation expert to do a tax return.
Rounding out the 'Dirty Dozen' are, Hiding Income Offshore, “Free Money” from the IRS & Tax Scams Involving Social Security, False/Inflated Income and Expenses, False Form 1099 Refund Claims, Frivolous Arguments, Falsely Claiming Zero Wages, Abuse of Charitable Organizations and Deductions, Disguised Corporate Ownership, and Misuse of Trusts.
The IRS press release fully explains what is involved with each of these frauds. The agency also indicated any individual believing his/her personal data has been stolen and used for tax purposes should, without hesitation, contact the IRS Identity Protection Specialized Unit; more information can be obtained at:
According to Life Inc. (via MSNBC) the IRS estimated over 400,000 individuals were victimized by identity theft tax fraud from mid-2009 to the end of 2011.
Life Inc. also reported a spokeswoman for Intuit, parent company of tax software creator TurboTax, said the company has recently increased its fraud prevention efforts.
While the fact the IRS is being proactive is good news, this doesn't meant there aren't problems. In Nov. 2011 Digital Journal had reported an audit conducted by the U.S. Government Accountability Office (GAO) found the tax agency had lapses in security for taxpayer data. On the plus side, many of these issues are being corrected, as the GAO had acknowledged the IRS made some strides in fixing security and privacy related issues.
More about Irs, Internal revenue service, dirty dozen, tax scams 2012, tax scams
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