Now
that the 2013 filing season has officially begun the IRS has recently published
its now infamous “Dirty Dozen” tax scams. An accountant friend of mine was
concerned for an official looking correspondence received by a client
purportedly from the Internal Revenue Service. I will admit that the fraud in
preparing the document had been well-planned and executed. Nonetheless, closer
scrutiny of the language and threats used made it crystal clear that
it was one of the tax scams the IRS is concerned about. This year's list
includes the most important scam development in recent years: Identity Theft.
This occurs when someone uses personal information as such as a client’s name,
social security number or other identifying information. This fraudulently
obtained information is then used to file a tax return and claim a refund.
Honest taxpayers often do not discover this problem until they go to file their
own valid tax returns. IRS has included on its website entire sections devoted
to the problem including a YouTube video. The website also provides information
on how to contact the IRS identity protection specialized unit. Along with
identity theft is the use of telephone scams. Preying often on elderly
taxpayers purported IRS collection agents threaten immediate levy and seizure
action on taxpayers bank accounts if payment of an outstanding tax liability is
not made immediately by credit card. In a ridiculous attempt to scare people
into action and payment these telephone scams often include a threat to revoke
the taxpayer’s drivers license. In many cases follow-up calls are made by what
appears to be local police officers inquiring about the tax debt and driver
information. Return call phone numbers very similar to the real thing are
provided with tax scammers ready to answer at the other end. Taxpayers may also
receive fake e-mails directing them to a fraudulent though convincing IRS
website where valuable personal information is requested. Also included in the
list is outrageous claims of free money from tax return preparers. Often the
earned income credit is the tool used. Taxpayers should be cautioned that they
remain responsible for deductions and credits claimed on their own tax returns
even though prepared by what appears to be a legitimate tax return preparer. Of
the other dirty dozen, many on the list for several years are: Hiding income
offshore, impersonation of charitable organizations, false income expenses or
exemptions, promoters of frivolous tax scheme arguments, falsely claiming zero
wages or using false forms 1099, abusive tax structures and misuse of trusts.
