By Karin Price MuellerAs taxpayers frantically get their paperwork together to file their tax returns, scammers are in overdrive.This is the peak season for tax scams, according to the IRS, which released its annual "Dirty Dozen" — the most common tax scams around.Some of the schemes are old, some are new and some are returning scams with fresh twists. Some are perpetrated by dishonest tax preparers, and some by ordinary people.Here's a look at them all.
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Phishing scams continue to target taxpayers. (pixabay.com)
Phishing scams
Scammers use fake emails to try to trick taxpayers — and tax preparers — into revealing personal information.Phishing isn't new, but scammers have added several new twists.One new scheme involves a taxpayer's own bank account."After stealing client data from tax professionals and filing fraudulent tax returns, the criminals use taxpayers' real bank accounts to direct deposit refunds," the IRS said. "Thieves are then using various tactics to reclaim the refund from the taxpayers, including falsely claiming to be from a collection agency or representing the IRS."
In another fraud attempt, scammers send emails to tax professionals, payroll professionals, human resources personnel, schools and individual taxpayers.The emailer poses as a person or organization the recipient trusts or recognizes, the IRS said. To do this, the scammers may hack an email account and send mass emails under another person’s name, or they may pose as a bank, credit card company, tax software provider or government agency."Criminals go to great lengths to create websites that appear legitimate but contain phony log-in pages," the IRS said. "These criminals hope victims will `take the bait' and provide money, passwords, Social Security numbers and other information that can lead to identity theft.
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Beware of phone calls from someone who says they work for the IRS. (pixabay.com)
Phone scams
Phone scams continue to be a favorite of IRS scammers.The IRS said during filing season, it generally sees a surge in scam phone calls threatening arrest, deportation and license revocation if the victim doesn’t pay a bogus tax bill.In these scams, the caller will impersonate an IRS official, saying the victim needs to send cash — usually through a wire transfer or prepaid debit card.The IRS said these scammers often change caller ID numbers to make it look like the IRS or another legitimate agency is calling, and they often have private information about the intended victim to make the call sound official.The agency said it will never call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, it said, the IRS will first mail a bill if you owe taxes.
Identity theft
The IRS said reports of tax-related identity theft been on the decline, but it's still widespread enough to make the “Dirty Dozen” list.The numbers are an improvement, with a 40 percent decline in 2017 over the previous year, the agency said, with 242,000 reports from taxpayers in 2017 compared to 401,000 in 2016.But it still happens."Tax-related identity theft occurs when someone uses a stolen Social Security number or Individual Taxpayer Identification Number (ITIN) to file a fraudulent tax return claiming a refund," the IRS said.To protect yourself, the IRS recommends you and your tax preparer always use security software with firewall and anti-virus protections, and that you always encrypt sensitive files such as tax records. Don't click on fishy emails, and keep your personal information safe.