5 Tax Scams to Watch Out For in 2016

Image source: Flickr user Adam Thomas.

Every filing season, taxpayers have to be on the lookout for con artists looking to run tax scams. With a variety of tactics at their disposal, these criminals find ways to get your personal information and look to turn it into cash. Let's take a look at five of the most common tax scams that the IRS has highlighted in recent warnings to taxpayers.

1. Identity theftThe most pernicious tax scam involves thieves stealing your personal information and using it to file false tax returns on your behalf. Crooks arrange to provide erroneous information on a return that will generate a refund that they can then intercept and take for themselves. Often, the scam goes unnoticed until you later file your legitimate tax return and the IRS informs you that a return has already been filed. The IRS has issued about 1.5 million personal identification numbers aimed at helping victims of identity theft, and it has also started a pilot program in certain states that allows people to get PINs even if they haven't been victimized. For most taxpayers, though, the best defense is to protect your personal information as well as you can.

2. IRS impersonation Criminals work hard to try to trick and intimidate you into giving them valuable personal information. Some scams involve threatening emails or phone calls from people purporting to work for the IRS, saying that you could be arrested, have your license revoked, or even get deported if you don't agree to comply with their demands. The IRS reminds taxpayers that it will never call to demand immediate payment, ask for credit or debit card numbers over the phone, or threaten to bring in law enforcement officials. Nevertheless, these scams can be quite convincing.

3. Caller ID spoofing One tool that many criminals have in their arsenal of tricks is the ability to have your caller ID system display what appears to be a legitimate IRS toll-free customer service number. These scams often involve robo-calling systems and can include a combination of tactics, including related emails and phone calls purporting to be from other organizations like police or DMV. The IRS advises that if you're ever uncertain, hang up and then call the IRS back at 1-800-829-1040. That way, a real IRS representative can confirm whether there's a legitimate issue.

4. Bogus charitable organizationsThe end of the year brings a big uptick in charities asking for donations, and criminals have discovered that many people are willing to part with their money for what they think is a good cause. Earlier this year, four charities claiming to raise money for cancer victims were accused of fraud, with the FTC alleging that donors were taken for $187 million over a five-year period. Often, such charities have convincing names, but it's important to go further to check that these organizations are legitimately registered with the IRS as tax-exempt non-profit organizations. This IRS website will let you enter the name of a charity to verify whether it's legitimate and is still eligible to receive tax-deductible contributions.

5. Tax preparer phishingNot all scammers target individual taxpayers. In one scam, criminals send out emails to accountants and other tax preparation professionals, telling them that they need to update their information in order to keep using the IRS e-services portal. In the process, the con artists hope that unsuspecting accounts will provide their usernames, passwords, and electronic filing identification numbers. That information in turn can help the criminals impersonate tax preparers and seek to get personal information from clients and other individual taxpayers.

Doing your taxes is hard enough without having to worry about tax scams. With plenty of crooks out there, you can't afford to let up your guard. Knowing the tactics they use can help you avoid getting scammed.

The article 5 Tax Scams to Watch Out For in 2016 originally appeared on Fool.com.

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