The Agency Insider with Linda McGlasson

The 'Dirty Dozen' Tax Schemes to Avoid

The 'Dirty Dozen' Tax Schemes to Avoid

These schemes are not only illegal -- they mean trouble for those perpetrating them -- but the unwary taxpayer is also held responsible. If a taxpayer is tricked into taking part in these scams, they must pay any unpaid taxes along with any interest and penalties incurred.

The IRS "Dirty Dozen" list includes:

  • Taxpayer return preparer fraud;
  • Hiding offshore accounts;
  • Phishing;
  • Filing false or misleading forms.
Institutions should educate their customers about these scams and also be on the watch for misuse of customer accounts related to the "Dirty Dozen." 

Institutions should educate their customers about these scams and also be on the watch for misuse of customer accounts related to the "Dirty Dozen." If your customers have someone else prepare their taxes, assemble a list of the local reputable tax return preparers in your area, (start by checking with your Better Business Bureau) and tell them to check their credentials carefully. Legitimate preparers have a preparer tax identification number (PTIN) and are registered with the IRS.

Another regularly occurring scam that appears this time of year are the phishing emails that happily inform the recipient that they've got tax refund money due to them. Tell your customers that despite the flood of messages purportedly from the agency, the IRS doesn't discuss tax account matters via email. It also doesn't initiate taxpayer contact via unsolicited email or ask for personal identifying or financial information. Remind your customers that taxpayers do not have to complete a "special form" to obtain a refund.

The IRS also wants people to report fraud when it happens. If taxpayers suspect fraud, they should report it to the IRS using Form 3949-A, Information Referral. The IRS asks that the consumer give as much detail regarding the activity as possible, such as who is being reported, the activity taking place, how it was uncovered and when and where the activity took place. Address the form to the IRS, Fresno, CA 93888.

About the Author

Linda McGlasson

Linda McGlasson

Managing Editor

Linda McGlasson is a seasoned writer and editor with 20 years of experience in writing for corporations, business publications and newspapers. She has worked in the Financial Services industry for more than 12 years. Most recently Linda headed information security awareness and training and the Computer Incident Response Team for Securities Industry Automation Corporation (SIAC), a subsidiary of the NYSE Group (NYX). As part of her role she developed infosec policy, developed new awareness testing and led the company's incident response team. In the last two years she's been involved with the Financial Services Information Sharing Analysis Center (FS-ISAC), editing its quarterly member newsletter and identifying speakers for member meetings.

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