Each year, the Internal Revenue Service compiles a list of the 12 most common, dangerous or costly tax scams. They call this list their “dirty dozen” and recommend that taxpayers stay vigilant during tax season. We will summarize these twelve scams for you, and highlight the steps you should take to protect yourself.
Over half of taxpayers put their returns in the hands of tax preparers, and this leads to the possibility of tax preparer fraud. A small number of tax professionals will act dishonestly, or scammers will take advantage of tax season by presenting themselves as trusted professionals to steal private information. The IRS has published steps to avoid this problem, and they center around carefully selecting a tax preparer.
First, always check that your tax preparer is registered with the IRS and has an IRS Preparer Tax Identification Number (PTIN). You can search for tax preparers here. However, dishonest tax professionals still exist—some take a fee of the refund earned by the taxpayer, so they will mislead their clients by instructing them to claim exemptions or credits the taxpayer does not qualify for. Avoid tax preparers who are paid a percentage of the refund, and check that the refund goes directly to you. Never sign a black return—always look over the completed return and verify the banking details. If you need to make a complaint about a tax professional, you can do so here but remember, the taxpayer is still legally responsible for the completed tax return.