Every year, the IRS publishes the 12 most common scams or problems that taxpayers could encounter; a “Dirty Dozen” list. They come in a variety of different categories.
The first kind of group of them is in the realm of identity theft, where somebody intercepts taxpayers’ sensitive information to either steal their identity for other purposes or prepare fraudulent tax returns to claim refunds using their social security numbers and other information.
The other category covers phishing scams where nefarious actors try to gain access to sensitive information at tax season, either by posing as tax professionals or IRS personnel.
Phone scams also find their way onto the Dirty Dozen list. These situations cover bad actors who try to impersonate IRS personnel in an attempt to extort money or other things of value from taxpayers and threaten them.
Other things that come are merit-based or actually issues on the return, such as frivolous positions, constitutional arguments, false charities or fictitious charities. Those type of positions always make it on the Dirty Dozen list.
Other issues on the list relate to the tax return preparers themselves to alert taxpayers to some common scams that they might see spike during tax season. These include uncommon or seemingly excessive refunds or credits, erroneous deductions and understating income. If a taxpayer’s presented with a refund that they can’t explain or understand why it’s so much larger than any of that they’ve ever received in the past or any of their friends, associates or colleagues have received, that might be evidence of a scam.
And then finally, the Dirty Dozen list usually includes some type of overseas, offshore foreign alert just to remind taxpayers that the US taxes on worldwide income and any attempt to move income overseas or offshore if it’s presented as a legitimate plan, may in fact be evidence of a scam.