The Internal Revenue Service (IRS) recently unveiled its traditional Dirty Dozen Scam list. Let’s take a look.
Each year, the IRS generates some buzz for its cleverly named Dirty Dozen list. To be fair, each year there is often some overlap from prior lists, but we won’t hold it against them. It is not a bad idea to be reminded of common schemes that smart folks fall for every day. Plus, we are tax attorneys and we like to help our clients build and protect their wealth. If we can help you avoid tax fraud, it’s a good day.
Drum roll, please! The 2020 Dirty Dozen tax scams the IRS wants you to avoid include:
- Phishing: The bad guys are after your personal contact information. With not much effort they can put together a profile and enough data points to hack financial accounts, tax returns, or use your passwords to gain access to networks, protected health information (PHI), or the personal information of friends and family. Provide information on a need-to-know basis and think before you click.
- Threatening impersonator phone calls, tax refund fraud and theft: After obtaining financial or other sensitive data, a person calls a taxpayer pretending to be the IRS and offering to take care of an alleged tax crime for a fee. Scammers also steal tax refunds and use them as a basis for fraud against unsuspecting taxpayers.
- Fake charities and social media scams: Social media are ripe hunting ground for scammers. From setting up fake charities to social media questionnaires, and other invasive tactics used to harvest personal information, living large online can lead to identity or financial theft.
- Ransomware: Often infecting a computer after a successful phishing attempt, ransomware self-installs on your computer, locking it down or quietly siphoning off information like passwords or other confidential information. Ransomware can be ruinous to businesses without appropriate backup protocols.
- Senior fraud and ESL scams: Criminals more often target seniors and those who are not fluent with the English language. These vulnerable populations should be aware they are being targeted. Caution is needed by all when clicking around the internet or responding to phone calls from people offering services or threatening tax litigation for unpaid sums.
- Payroll scams: Fraudsters use phishing attacks to uncover employee W-2 information, transmit phony invoices, and trick company officers into sending payments or direct deposits to bogus accounts.
- Tax preparer fraud: Anyone can be financially damaged by an unscrupulous tax preparer. Use only well-credentialed and experienced preparers, and be sure to review your return before signing. If you sign without review, you could be filing a false income tax return. Tax preparers may also harvest personal data from clients to sell to other bad actors.
- Offers in compromise (OIC): An offer to pay a compromise amount on an overwhelming tax liability is an important tool for taxpayers. Unscrupulous businesses prey on taxpayers by charging a fee to prepare an OIC that may never pass muster with the IRS. The agency notes 54,000 OICs were submitted in 2019, and 18,000 were accepted by the IRS.
There is plenty in this list to remind us of the tax controversy and financial troubles that are sometimes just a computer click or phone call away if we are not vigilant. If in doubt, step back and call your tax attorney or accountant to make sure you are not ensnared by a Dirty Dozen tax scam.
In Cleveland and Chicago, our seasoned tax lawyers can help you if you are dealing with the IRS
At Robert J. Fedor, Esq., LLC we deliver aggressive legal protection if you are dealing with a payroll tax issue or problems with foreign bank account, among other tax challenges. Contact us today or call 800-579-0997.
