Features

2012 ‘Dirty Dozen’ Tax Scams
Tax time is prime hunting season for scammers looking to prey on unsuspecting taxpayers. Here’s what you need to be on the watch for so you don’t become a victim.

1040_2010_taxform

As you prepare your taxes this filing season beware of these common scams, according to the IRS.  

Computer Criminal

Identity Theft

Identity thieves often attempt to use a taxpayer’s identity and personal information to file a phony tax return and then collect a fraudulent refund.

Be Proactive

Phishing

Phishing scams usually use unsolicited emails or fake websites that look legitimate to get consumers to disclose personal and financial information.

iStock

2_budget_planning, PF slideshow

Return Preparer Fraud

Always do your research, ask for recommendations, or read reviews before hiring a  tax professional.

Euro Banknotes Coins Calculator

Hiding Income Offshore

The IRS has increased its efforts to catch taxpayers hiding income outside the country to evade paying taxes.  There are legitimate reasons to keep accounts overseas—but be sure to file the required paperwork.

Reuters

Counting Hundred Dollar Bills Cash

‘Free Money’ Scams

Scammers take advantage of taxpayers by promising them free money from the government or promising refunds that don’t exist.  

Calculator Lying on a Balance Sheet

False/Inflated Income and Expenses

Don’t file a return that includes income that was not actually earned, or expenses not paid to try and increase the amount of refundable credits.

IRS_Tax_Return_Envelope

False Form 1099 Refund Claims

Some taxpayers try to pull a fast one by including false information on forms to justify a refund claim.

Tax Form 1040A, 640x360

Frivolous Arguments

The IRS has heard plenty of illogical and outlandish arguments from taxpayers in an effort not to have to pay owed taxes.

Reuters

taxes, tax return, tax check, tax refund, Tax Treasury Check Flag

Falsely Claiming Zero Wages

Scammers file false information about their wages in an effort to reduce their taxable income to zero—it’s a bad idea, don’t do it.

Manwritingonnotepad

Abuse of Charitable Organizations and Deductions

Some scammers attempt to use charitable organizations to shield income or assets from being taxed,  or get non-cash assets overvalued by the organization.

Bank Statement FBN

Disguised Corporate Ownership

Corporate entities created in an effort to conceal the true ownership of a business and underreport income or claim fictitious deductions.

Cash in a Chest

Misuse of Trusts

Some taxpayers attempt to set up and misuse trusts in an effort to reduce the amount of income subject to tax.

2012 ‘Dirty Dozen’ Tax Scams

Tax time is prime hunting season for scammers looking to prey on unsuspecting taxpayers. Here’s what you need to be on the watch for so you don’t become a victim.

More From Our Sponsors