IRS warns taxpayers to avoid the 'Dirty Dozen' scams

It’s tax season, and every year, people fall prey to tax scams. The IRS recently sent a list of its “dirty dozen” so taxpayers can avoid becoming a victim.

• Identity theft. Tax fraud using identity theft tops this year’s Dirty Dozen list. In many cases, an identity thief uses a taxpayer’s identity to illegally file a tax return and claim a refund.

• Pervasive telephone scams. The IRS has seen an increase in local phone scams across the country. Callers pretend to be from the IRS in hopes of stealing money or identities from victims. If you get a call from someone claiming to be from the IRS — and you know you owe taxes or think you might owe taxes, call the IRS at 1-800-829-1040. If you get a call from someone claiming to be from the IRS and know you don’t owe taxes, call and report the incident to the Treasury Inspector General for Tax Administration at 1-800-366-4484.

• Phishing. Phishing scams typically use unsolicited emails or fake websites that appear legitimate. Scammers lure in victims and prompt them to provide their personal and financial information.

• False promises of “free money” from inflated refunds. The bottom line is that you are legally responsible for what’s on your tax return, even if someone else prepares it. Scam artists often pose as tax preparers during tax time, luring victims in by promising large tax refunds.

• Return preparer fraud. Most return preparers provide honest service to their clients. But some dishonest preparers prey on unsuspecting taxpayers, and the result can be refund fraud or identity theft. For tips about choosing a preparer, visit

• Hiding income offshore. While there are valid reasons for maintaining financial accounts abroad, there are reporting requirements. U.S. taxpayers who maintain such accounts and do not comply with these requirements are breaking the law.

• Impersonation of charitable organizations. Taxpayers need to be sure they donate to recognized charities.

• False income, expenses or exemptions. Falsely claiming income you did not earn or expenses you did not pay in order to get larger refundable tax credits is tax fraud.

• Frivolous arguments. Frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. The IRS has a list of frivolous tax arguments that taxpayers should avoid.

• Falsely claiming zero wages or using false Form 1099. Filing false information with the IRS is an illegal way to try to lower the amount of taxes owed.

• Abusive tax structures. These abusive tax schemes often involve sham business entities and dishonest financial arrangements for the purpose of evading taxes. The schemes are usually complex and involve multi-layer transactions to conceal the true nature and ownership of the taxable income and assets.

• Misuse of trusts. There are reasonable uses of trusts in tax and estate planning. However, questionable transactions also exist.

The best defense is to remain vigilant. Get more information on tax scams at