The Internal Revenue Service (IRS) released its annual list of “Dirty Dozen” tax scams Tuesday to urge taxpayers to be on the lookout for illegal schemes.
Tax scams can lead to fraud and identity theft, so the IRS encourages taxpayers to protect themselves from becoming victims.
Identity theft tops the IRS list of tax scams this year. Identity theft occurs when someone uses your name, Social Security number or other personal information without your permission.
According to officials, many scammers will use a taxpayer’s identity to fraudulently file a tax return and claim a refund.
Phishing is something else to look out for. Scammers use an unsolicited email or a fake website to get people to provide personal and financial information. Criminals can use this information to commit identity theft or financial theft.
The IRS asks people who receive emails that appear to be from the IRS or other organizations, such as the Electronic Federal Tax Payment System, to report them by sending them to firstname.lastname@example.org .
Return preparer fraud also falls on the list. According to the IRS, 60 percent of tax payers will hire tax professionals to prepare their tax returns. Officials said while most return prepares are honest, some are scammers who will use the information illegally.
The IRS urges taxpayers to choose their return preparers carefully.
Other scams on the Dirty Dozen list for 2013:
Hiding income offshore
“Free money” from the IRS and tax scams involving Social Security
Impersonation of charitable organizations
False/inflated income and expenses
False form 1099 refund claims
Falsely claiming zero wages
Disguised corporate ownership
Misuse of trusts
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