The “Dirty Dozen” – Part I: Scams 1- 4

April 29, 2014 by Carol Thompson, EA
Crime scene tape and magnifying glass over 1040 tax forms

Every year during awards season, the IRS announces its list of the Top Twelve Scams of the Year, or, The Dirty Dozen. Watch for these scams and report them to the IRS, the Federal Trade Commission, and your local District Attorney:

  1. Identity Theft. This is the Number One problem for the IRS. If you believe your identity has been compromised, call the IRS Identity Protection Specialized Unit at 800-908-4490. (Watch this space for an upcoming in-depth discussion of ID Theft.)
  2. Telephone Scams: In 2013 and 2014 there has been a significant increase in telephone scams. The caller claims to be from the IRS, the police, the DMV, or similar government agencies and claim:
    • Your relative is in jail; you owe money for taxes; or you are being audited.
    • You have to give them your social security number, birth date, credit card or bank account information, and pay money immediately.
    • You can go to jail, be deported, or have your license suspended.
  3. The IRS does not call or email taxpayers to request personal information. Do not give out any information – even if you are threatened. Contact:
    • IRS: 800-829-1040. The employee you speak with can check your account to see if you owe money.
    • Federal Trade Commission: Go to “FTC Complaint Assistant” and add “IRS Telephone Scam” to the complaint.
  4. Phishing. Victims are contacted using unsolicited email or fake websites that appear to be from a government agency requesting personal and financial information. Send it as an attachment to Remember – the IRS and most government agencies do not initiate bills using email!
  5. False promises of “Free Money” from Inflated Refunds. Be careful selecting a tax preparer. Scam artists use flyers, church bulletins, word of mouth, community groups, paid “recruiters’” and phony store fronts to promise special rebates, benefits, and tax credits that do not exist. They may take a percentage of your refund (illegal under the law) or large upfront fees. To protect yourself:
    • Verify that the preparer is legit. All preparers are required to have a “PTIN” that must be on all returns filed. The IRS sends out a receipt for the PTIN renewal each year. Many preparers are licensed at a state or federal level. ASK.
    • Preparers should ask questions about income and deductions. Taxpayers should keep copies of all documents presented for their tax preparation.
    • Scam artists file for inflated Earned Income Credits, American Opportunity Credit (education), or fictitious income or deductions.
    • All tax preparers are required to give clients a full copy of the return that was filed.
    •  All taxpayers are required to sign Form 8879 if filing electronically. Read the return before signing any documents!
    • Refunds should be mailed to the taxpayer’s address or be deposited in a bank account under the control of the taxpayer. If the tax return shows a different address or bank account, report it at once.

In Part II, we will discuss 5 – 7 on the list of scams. See you then!

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