The IRS calls them the “Dirty Dozen,” the most common tax scams that you might encounter as you hustle to file your form by April 15.
It’s safe to say that most of us dread nothing more than tax time—and there are a lot of con men out there preying on those fears.
The list also contains a few of the more common scams that the IRS routinely uncovers in tax forms each year. So, if you were thinking of cheating on your tax form, let’s just say they’re on to you.
From phishing to phone scams, here are twelve of the most common scams.
All those emails from the king of Nigeria, asking to wire you money through your bank? That’s phishing, when fake emails or website attempt to get access to personal information. The IRS will never initiate contact with you, so if someone is, it’s a scam.
2. Phone scams
If you pick up the phone to hear someone saying “Hi, I’m an IRS agent, and I wanted to talk to you about your taxes,” hang up and head over to the FTC online complaint assistant to report it.
3. Identify theft
Yes, the worst fears of every American are true. There are people out there looking to steal your identity all year long; not just during tax season. Some criminals will file fraudulent taxes using stolen Social Security numbers. The only people who should see your Social Security number include your bank, the government, the DMV and your mother.
4. Return preparer fraud
They might look like buttoned up tax professionals, but they might also be scammers posing as tax preparers, looking to get access to your personal information. Don’t be afraid to ask for credentials. You can use this IRS directory to find one that won’t steal your credit card numbers.
5. Inflated refund claims
If your tax preparer is promising you that your refund might be bigger than you thought, watch out. It’s not likely.
6. Falsifying income to claim credits
If your tax preparer is telling you that you qualify for tax credits, which were designed to offset the cost of taxes for low-to-moderate earners, look out. People filing for tax credits they don’t qualify for might end up paying all that money back, and then some, with back taxes, interest and penalties.
7. Padding deductions on returns
While you might really want to claim that time you took a client to the best restaurant in town as a business expense, check with your accountant first before overstating deductions.
8. Fake charities
Giving charity’s a beautiful thing, but make sure that tax-deductible check you’re signing is going to an actual charity, and not a group posing as a charity to get donations. Consult the IRS’ tax exempt organization search to see if that soup kitchen is actually a soup kitchen.
9. Excessive claims for business credits
The IRS wants you to know that unless you’re conducting business off-highway, that enticing fuel tax credit is probably not for you. Also not for your average American? The research credit, which Congress enacted in 1981 so private industries would invest in scientific experimentation. Googling the history of egg salad multiple times probably doesn’t qualify you.
10. Offshore tax avoidance
Keeping your money in countries with loose tax laws is never a good idea. Even Debbie Ocean in Ocean’s 8 eventually wound up in jail.
11. Frivolous tax arguments
If you want to file a tax return stating that you morally or religiously don’t believe in taxes, as true as that might be for you, the IRS would consider it a frivolous tax argument and fine you $5,000. Plus, then you’d still have to pay your taxes.
12. Abusive tax shelters
Think billionaires placing their money in trusts and syndicated conservation easements, which allow people to invest their money in land conservation deals, tax-free. If your accountant has a solution to you not paying taxes that involves a five-minute-long explanation of what a conservation easement is, look out.
If you’re looking for more information on the nefarious Dirty Dozen, head to the IRS website.