The IRS Dirty Dozen lineup for 2024 lays bare the most prevalent tax scams preying on taxpayers, offering crucial guidance to sidestep these deceptive ploys. Below, we present a succinct rundown of the main scams flagged by the IRS this year, along with recommendations for shielding yourself:
- Phishing And Smishing Schemes. These schemes employ unsolicited emails or text messages posing as the IRS or concerning tax matters to steal personal data. To shield against them, avoid clicking on links or downloading attachments from unverified or suspicious sources.
- Bogus Charities. In these scams, fraudsters set up fake charities to exploit taxpayers’ generosity, especially during crises. Verify a charity’s legitimacy by consulting the IRS’ Tax Exempt Organization Search before donating.
- Threatening Impersonation Calls. Fraudsters impersonate IRS agents, issuing threats of immediate arrest, deportation, or license revocation unless taxes are promptly paid. Remember, the IRS communicates initially by mail, not phone.
- Social Media Deceptions. Misleading tax advice and offers proliferate on social platforms. Seek tax guidance from professional, verified sources rather than unsolicited online information.
- Unscrupulous Tax Preparers Some preparers entice with promises of unusually high refunds or fees contingent on the refund amount. Choose a reputable tax preparer and avoid those boasting about larger refunds than others.
- Peddling Fake Tax Credits. This entails making inflated claims like exaggerated fuel tax credit requests. Exercise caution with anyone offering unrealistically large refunds or credits.
- Targeting Non-English Speakers And Seniors. These schemes often involve additional threats and misleading information. Communities should support vulnerable members by providing information and resources in various languages.
- ‘Ghost’ Tax Preparers. These individuals prepare tax returns but neglect to sign them, signaling potential fraud. Ensure any tax professional you engage signs your return and includes their Preparer Tax Identification Number.
- Unauthorized IRS Online Assistance. Scammers may offer to help create IRS online accounts to access personal information. Safely set up these accounts directly through the official IRS website.
- Misuse Of Trusts. Some promoters advise transferring assets into trusts, claiming it will reduce taxable income or increase deductions. These schemes can be legally complex and are often exploited for deceptive tax advantages.
- Abusive Tax Shelters. These involve intricate tax strategies that falsely promise tax benefits, typically recommended by dishonest advisors to evade taxes.
- Baseless Tax Arguments. These schemes urge taxpayers to present absurd and unfounded claims to avoid taxes. The IRS has identified and invalidated many such arguments in court.
To guard against these scams and other fraud, always verify information via the IRS website, safeguard your personal information diligently, and seek advice from reputable tax professionals. Additionally, report any suspicious activities to the IRS or the Treasury Inspector General for Tax Administration.