IRS Announces Annual Scams

Each year the IRS announces the “Dirty Dozen Tax Scams” they encounter most frequently regarding frivolous tax arguments and fraud. While seven of the “scams” are related to, “don’t cheat we have our eyes on you,” the other five are scams that all of us should be ready to detect so we do not become victims.

T1Phone scams. This tax scam has appeared on the IRS list for many years. What is new this year is the increase in volume and the threatening nature of the calls. These scam artists often have some of your personal information and can fool your caller id to falsely identify themselves. How would you react if someone threatened you with jail time, deportation or license revocation? Remember, never give information over the phone to someone claiming to be from the IRS when they call.

T2Phishing. This recurring scam involves receiving fake emails and website links that look like the real deal. The IRS will not send you billing information or refund information via email. Do not click on any link from an email received from the IRS unless you requested it. Remember the IRS does not initiate contact through emails.

T3Identity Theft. The IRS is taking precautionary measures to curtail this problem. This year the IRS is limiting the number of direct deposits it will make to any single account. There are now taxpayer single use tax id’s attached to tax returns that have had identity problems. Some states have even shut down software e-file transmissions from providers with possible fraud problems like Turbo Tax. Here is a link to the IRS identity protection page should you wish to know more. Reporting IRS identity theft

T4Offshore accounts. The IRS has taken many enforcement actions in this area after breaking the long-standing secrecy wall of Swiss bank accounts. If you have money in foreign accounts, you must understand the reporting requirements or you could be subject to substantial fines.

T5Fake Charities. After major disasters, many charitable givers are scammed into making donations to fake charities. In addition, new IRS charitable organization reporting requirements are not being followed by many organizations. This makes donations to them non-deductible. To protect against this, prior to donating funds make sure the charity is both legitimate and deemed a qualified charity by the IRS. If in doubt, you can always check to see if a charity is approved on the IRS web site. Here is a link to their tool. IRS Exempt Organization Check