Tax time is high season for crooks and scammers looking to make a quick buck, but thankfully the IRS, as it does every year, has released the top 12 scams people need to watch out for when filing their taxes online this year.
Topping the IRS' annual Dirty Dozen list is identity theft, scams the IRS says are kicked off by phony emails typically claiming that more than one return was filed in the taxpayer's (your) name, or that you received wages from an unknown employer, and you must contact the email sender — the crook — immediately.
Identity theft victims are some of the most complex cases the IRS handles each year, and the IRS says despite its crackdowns — one recent sweep targeted 105 perpetrators in 23 states — "the agency is also seeing an increase in identity crimes, including more complex schemes."
Along with phishing emails purporting to come from the IRS, and fake 1099 refund scams, the IRS warns people to be aware of a relatively new type of swindle that extends beyond the borders of your computer: Return Preparer Fraud.
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The IRS says about 60 percent of taxpayers will seek professional help to prepare and file their tax returns this year, and while "most return preparers provide honest service to their clients," the Dirty Dozen list says that, "as in any other business, there are also some who prey on unsuspecting taxpayers."
Ranked third, just behind phishing, return preparer fraud scammers "have been known to skim off their clients' refunds, charge inflated fees for return preparation services and attract new clients by promising guaranteed or inflated refunds."
The IRS advises taxpayers to watch out for several signals that indicate an "unscrupulous" tax return professional, including if he or she asks for a copy of your tax return, adds forms to your return you've never filed before, encourages you to falsify your return, charges a percentage of the refund as "preparation fee" and requires you to split the refund.
Another tax-time trick that could leave gullible people in financial trouble over the next few months is the "free money" scam. Bogus flyers and advertisements for "free money" have been appearing across the country, the IRS says, especially in community churches.
These schemes, which spread often by word-of-mouth, typically prey on low-income individuals and the elderly by promising nonexistent Social Security refunds or rebates.
Along with heeding the warnings outlined by the IRS, it's important to be extra vigilant about your personal and financial information during tax season. Ignore any suspicious emails that ask you to input any personal data, even if the messages appear to come from the IRS or another government agency.
With so much money at stake, and so many taxpayers using the Web to process their returns, online scammers will use every available weapon in their arsenal. With common sense, a watchful and skeptical eye and strong anti-virus software, you can file your taxes online safely and avoid the landmines the scammers have laid out.