Washington Alert-Part I

…IRS has issued a new warning to taxpayers to be on the alert for three prolific tax scams that top the agency’s list of the “Dirty Dozen” scams. (IRS Summertime Tax Tip 2013-26) The first scam is identity theft, which involves the unauthorized use of personal information, such as a person’s name, Social Security number, or other identifying information to commit fraud or other crimes. “An identity thief may also use another person’s identity to fraudulently file a tax return and claim a refund,” warned IRS. The second scam involves phishing, where scammers trick individuals into revealing personal or financial information. According to IRS, phishing scammers may pose as the agency and send bogus emails, set up phony websites, or make phone calls. “These contacts usually offer a fictitious refund or threaten an audit or investigation to lure victims into revealing personal information,” IRS said. The third scam involves tax return preparer fraud. “[While] most tax professionals file honest and accurate returns for their clients, some dishonest tax return preparers skim a portion of the client’s refund or charge inflated fees for tax preparation,” IRS said. It is important to remember that all paid tax preparers must sign the return they prepare and enter their IRS Preparer Tax Identification Number (PTIN), the agency stressed. Additional information can be found here.

© 2013 Thomson Reuters/RIA. All rights reserved.

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