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article imageIRS warns taxpayers to watch out for this year's 'Dirty Dozen'

By Leigh Goessl     Mar 29, 2013 in Business
Each year the U.S. Internal Revenue Service (IRS) sends out a list of its "Dirty Dozen" tax scams. Topping this year's list is, perhaps not surprisingly, identity theft.
Earlier this week, the IRS released its annual "Dirty Dozen" list. The list, which is comprised of the top identified tax-related scams, warns taxpayers of the various types of frauds that are most common. Identity theft, like last year, topped the list.
While the tax frauds happen year-round, it seems there is a boost around Tax Day, which is only a couple of weeks away. This year Tax Day falls on Mon., April 15.
"This tax season, the IRS has stepped up its efforts to protect taxpayers from a wide range of schemes, including moving aggressively to combat identity theft and refund fraud," said IRS Acting Commissioner Steven T. Miller in a press release. "The Dirty Dozen list shows that scams come in many forms during filing season. Don't let a scam artist steal from you or talk you into doing something you will regret later."
While many of these are schemers preying on taxpayers, others are acts that taxpayers take in order to avoid government imposed taxes. If caught, the IRS will take action.
Without further ado, here are 2013's top tax-related scams listed by the IRS:
• Identity Theft
• Phishing
• Return Preparer Fraud
• Hiding Income Offshore
• “Free Money” from the IRS & Tax Scams Involving Social Security
• Impersonation of Charitable Organizations
• False/Inflated Income and Expenses
• False Form 1099 Refund Claims
Frivolous Arguments
• Falsely Claiming Zero Wages
• Disguised Corporate Ownership
• Misuse of Trusts
The IRS notes that illegal scams can "lead to significant penalties and interest and possible criminal prosecution". The agency also noted it halted issuing $20 billion of fraudulent refunds last year, which includes identity theft related tax fraud. In 2011, it caught $14 billion.
Tax scams can target in many ways including email, social networks, telephone, letter and various other forms of social engineering. Some of the frauds may not be obvious and mimic/spoof a legitimate contact. For full description of each tax scam listed in the "Dirty Dozen", please see the IRS' news release.
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