12 Tax Scams to Avoid

Posted on Monday, May 01, 2023

Tax scams are a growing problem that affects millions of people every year. It is important to be aware of the various scams that exist so that you can avoid falling victim to them. The IRS has compiled a list of the 12 Dirty Dozen Tax Scams to help taxpayers identify and avoid them.

1. Phishing: Scammers will try to trick you into providing personal and financial information through fake emails, texts, or phone calls.
2. Identity Theft: Taxpayers should be vigilant in protecting their personal information to avoid having their identity stolen.
3. Return Preparer Fraud: Dishonest tax preparers may overcharge for their services or promise large refunds that are not legitimate.
4. Inflated Refund Claims: Taxpayers should be wary of preparers who promise overly large refunds, as they may be falsifying information.
5. Fake Charities: Scammers may pose as charitable organizations to solicit donations from unsuspecting taxpayers.
6. Frivolous Tax Arguments: Filing frivolous tax returns or making false claims can result in heavy fines or legal consequences.
7. Abusive Tax Shelters: Taxpayers should be wary of investment schemes that promise tax benefits but are actually illegal.
8. Offshore Tax Avoidance: Hiding assets offshore to avoid paying taxes is illegal and can result in serious legal consequences.
9. Social Security Number Scams: Scammers may use your social security number to file false tax returns and steal your identity.
10. Tax-Related Identity Theft: Taxpayers should be vigilant in monitoring their accounts and credit reports to detect any fraudulent activity.
11. Falsifying Income to Claim Credits: Lying about your income or expenses to qualify for tax credits is illegal and can result in heavy fines.
12. Charitable Contribution Scams: Be wary of charities that promise large tax deductions in exchange for donations, as they may be fraudulent.

By being aware of these 12 Dirty Dozen Tax Scams, taxpayers can protect themselves from fraud and avoid serious legal consequences. Always verify the legitimacy of any individual or organization requesting your personal or financial information, and report any suspicious activity to the IRS immediately.

Contributed By: Jenny Lemmon, CPA | Director | DWD CPAs & Advisors

Posted in Tax Topics For Individuals

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.