How To Identify & Avoid Tax Scams

Seems it happens every year. The Internal Revenue Service (IRS) issues a warning about the “Dirty Dozen” tax scam list. On it is a wide range of schemes from questionable tax preparation services to identity theft.

While many of these scams actually tax place all year round, it is during the peak tax season that they ramp up. That means if you need tax help, it is important you keep an eye out and:

  • be sure you choose a legitimate tax preparation service;
  • protect your identify from identity thieves;
  • look out for unsolicited email, especially if it says it is from the IRS or the Electronic Federal Tax Payment System (EFTPS);
  • report bogus emails to;
  • report all income accurately; and
  • don’t get sucked into believing the IRS is offering free money.

Claiming zero wages, abusing charitable deductions, transferring assets into a trust and more are just some of the Dirty Dozen Tax Scams for 2012. For a complete list, see IRS Releases the Dirty Dozen Tax Scams for 2012.

According to the IRS, “Scam artists will tempt people in-person, on-line and by e-mail with misleading promises about lost refunds and free money. Don’t be fooled by these scams.”

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. The IRS Criminal Investigation Division works closely with the Department of Justice to shutdown scams and prosecute the criminals behind them.

If you think you are the victim of a tax scam, report it to the IRS. If you find that you need tax help because you can’t pay the money you owe the IRS, it’s time to look at your financial situation.

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