As usual, the IRS has recently released this year’s Dirty Dozen List. The scams of this year are both old and new, as we saw the same covid-19 relief scams as well as some corrupt tax professionals. Just like every year, however, there are some new ways that tax scammers are trying to cheat the system.“Scammers are coming up with new ways all the time to try and steal information from taxpayers”, said Daniel Werfel, the newest commissioner of the Internal Revenue Service.
Fake Charities
Similar to previous years, the list for this year certainly saw its fair share of fraudulent charitable organizations. These fake charities tend to get set up throughout the year whenever a tragedy such as a natural disaster occurs. Once these fake charities are set up, the leaders of the organization reach out to people asking for money and personal information. Taxpayers often feel motivated to donate to some of these organizations because a charitable donation can potentially be a tax write-off for them in the future. This is why it is extremely important that taxpayers do research on the reputation of charities before making donations.
Fraud at the Pump
When the fuel tax credit was made, it was strictly designated for farm use and off-highway businesses and is not available to the common taxpayer. However, this did not stop some fraudulent tax professionals and marketers from promoting this tax credit to their clients who were not qualified. These fuel scams were being conducted by third-party marketing companies or tax pros that were enticing their client to claim the fuel tax credit fraudulently, promising a hefty refund in return. These scammers had their own motivations of course, as they inflated fees to their clients and some of these scams even resulted in ID theft for the taxpayer.
Phishing Scams
One of the more common scams we see almost every year on this list is phishing scams, which both taxpayers and professionals are susceptible to. This form of fraud involves scammers pretending to be legitimate agencies such as the IRS or US treasury, and reaching out to taxpayers. They reach out in a plethora of ways, including email and text. Like many other scams we see on the dirty dozen list, the intent of this one is to steal a taxpayer’s identification.
Wrap Up
It simply would not be a normal tax season if people weren’t trying to illegally cheat the system. By making this list public, the IRS hopes it deviates people from continuing to commit these fraudulent acts. Unfortunately, this is only the tip of the iceberg when it comes to examples of fraud or scamming this tax season. Click here to read the entire “IRS Dirty Dozen List”.