We’re on the cusp of the very busy tax season, when millions of Americans either give the taxman more of their hard earned money or they receive a portion of their money back.
At this time of the year, one of the biggest concerns that both the Internal Revenue Service and taxpayers have is the threat of scams, and taxpayers actually scamming the tax collecting department. From identity theft to email scams, the IRS is warning everyone to be just a little bit extra careful for the next few months.
In addition to tax scams, the IRS is also attempting to combat tax avoidance and tax shelters this year. IRS Commissioner John Koskinen said in a statement that most Americans pay their fair share, but there are still those who think they should be paying less to the federal government or are above the law – or they think it’s unconstitutional.
With that being said, tax scams reach their peak during filing season and if the perpetrator is caught then it can lead to hefty penalties and interest as well as possible criminal prosecution – the IRS works closely with the Department of Justice to shut down these scams before they become widespread.
In 2012, it was reported that the IRS could issue more than $26 billion in fraudulent tax refunds over the course of the next five years. J. Russell George, the Treasury Department’s inspector general for tax administration, told Congress that of the 2.2 million tax returns in 2011, 940,000 of them were unscrupulous through identity theft.
“Every filing season, scam artists lure victims in by promising outlandish refunds,” said Koskinen in a statement. “Taxpayers should be wary of anyone who asks them to sign a blank return, promise a big refund before looking at their records, or charge fees based on a percentage of the refund.”
Here are the 12 most common scams during tax filing season:
- Fake IRS calls
- Fake IRS emails
- Scammers steal your identity (name, address and Social Security numbers)
- Promise an enormous tax refund
- Doing your tax return at a very low rate
- Fraudulent charitable organizations
- Organizations claiming to hide your money offshore
- Pretending to earn very little money
- Claiming income they didn’t earn in the first place
- Using illegitimate trusts
- Abusive tax structures
- Arguing that taxes aren’t part of the United States Constitution
