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The IRS Dirty Dozen

Monday, March 11, 2019

IRS kicks off annual list of most prevalent tax scams:

Agency warns taxpayers of pervasive phishing schemes in its ‘Dirty Dozen’ campaign

 

The IRS warns taxpayers, businesses and tax professionals to be alert for a continuing surge of fake emails, text messages, websites and social media attempts to steal personal information. These attacks tend to increase during tax season and remain a major danger of identity theft. To help protect taxpayers against these and other threats, the IRS highlights one scam on 12 consecutive week days to help raise awareness.

Phishing schemes are the first of the 2019 “Dirty Dozen” scams. “Taxpayers should be on constant guard for these phishing schemes, which can be tricky and cleverly disguised to look like it’s the IRS,” said IRS Commissioner Chuck Rettig. “Watch out for emails and other scams posing as the IRS, promising a big refund or personally threatening people. Don’t open attachments and click on links in emails. Don’t fall victim to phishing or other common scams.” 

 

The IRS also urges taxpayers to learn how to protect themselves by reviewing safety tips prepared by the Security Summit, a collaborative effort between the IRS, state revenue departments and the private-sector tax community. “Taking some basic security steps and being cautious can help protect people and their sensitive tax and financial data,” Rettig said.

For more on the worst of the worst tax scams, visit https://www.irs.gov/newsroom/dirty-dozen.

Dirty Dozen 12 - Offshore Tax Cheating

Wednesday, March 21, 2018

The series of IRS "Dirty Dozen" for 2018 is complete:

#12:  IRS Committed to Stopping Offshore Tax Cheating
It was on last year's Dirty Dozen list of tax scams, also.  Follow this link to read up on this scam to avoid.

An Abusive Scheme Toolkit for External Stakeholders
Each toolkit provides an explanation of the scheme, background, facts and law, and talking points.
Follow this link for the Toolkit

 

Dirty Dozen 11 - Abusive Tax Shelters

Tuesday, March 20, 2018

The Internal Revenue Service warned taxpayers to be wary of abusive tax shelters, which remain on the "Dirty Dozen” tax scams.

Tax law generally allows businesses to create “captive” insurance companies to protect against certain risks. Traditional captive insurance typically allows a taxpayer to reduce insurance costs. The insured business claims deductions for premiums paid for insurance policies. Those amounts are paid, either as insurance premiums or reinsurance premiums, to a “captive” insurance company owned by the insured or parties related to the insured.

Be sure to avoid participating in schemes that lack the attributes of genuine insurance, e.g., coverage may insure implausible risks, fail to match genuine business needs, or duplicate the taxpayer’s commercial coverage.  Read more...

Dirty Dozen 10 - Frivolous Tax Arguments

Sunday, March 18, 2018

The Truth about Frivolous Tax Arguments

In “The Truth about Frivolous Tax Arguments,” the IRS outlines some of the more common frivolous arguments, explains why they’re wrong and cites relevant court decisions. Taxpayers have the right to contest their tax liabilities using IRS administrative appeals procedures or in court, but they are still obligated to follow the law.  Read more...

 

Dirty Dozen 9 - Fake Forms

Saturday, March 17, 2018

Falsified income, fake Forms 1099 part of IRS ‘Dirty Dozen’

A common tax scam the IRS sees each year involves falsifying income. The agency warns taxpayers to avoid related schemes to erroneously claim tax credits as well as more elaborate schemes that scam artists peddle.  These schemes include elaborate ruses involving bogus Forms 1099.

Much like falsely claiming an expense or deduction is improper, claiming income the taxpayer didn’t earn is also inappropriate.  Scammers provide fraudulent Form(s) 1099-MISC that appear to be issued by a large bank, loan service and/or mortgage company with which the taxpayer may have had a prior relationship.  Read more...