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Don't become a victim of this year's
Dirty Dozen Tax Scams

It's that time of year. The tax filing deadline is just about a month away and people are starting to freak out a bit.

That makes them prime targets for tax scammers.

In the last week, the Internal Revenue Service has been spreading the word on two new schemes that used real tax laws but to criminal ends: the American Opportunity education tax credit and state and local taxes on food.

But sadly, there are many more tax scams out there. These latest two to crop up didn't even make the IRS' 2012 edition of the Dirty Dozen Tax Scams.

Scam keyboard by stuartmiles99 via iStock_000019459874XSmall Photo by stuartmiles99 via iStock

Each year, the tax agency compiles the most egregious tax cons out there. One or two new ones might break into the tax scam big time and make the list, but many of the schemes are repeats year after year.

I count down this year's full tax scam list for Bankrate a la Dave Letterman, from number 12 to the number one worst con. Check it out.

But as a preview, here are the top three:

3. Return Preparer Fraud -- Most return preparers provide honest service to their clients. But as in any other business, there are also some who prey on unsuspecting taxpayers.

Protect yourself by thoroughly checking out your tax pro.

2. Phishing -- Yes, this is still at the top despite continual warnings about these unsolicited emails or a fake websites. Once you reply or click on the phony online address, the crook can get access to your personal tax and financial info.

So here's another warning: Don't reply or click on a site from someone you don't know.

Heck, be skeptical even if the info does come from a friend or relative. They could be unknowingly passing along dangerous phishing links.

And once again, remember that the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages or via social media channels. 

If you do get a suspicious tax-related email, let the IRS know by forwarding it to [email protected].

And the number one dirtiest of the dozen tax scams this year is ...

1. Identity Theft -- Obviously this is closely tied to phishing efforts, but it's serious enough that the IRS ranked it at the top of the 2012 Dirty Dozen Tax Scams list.

The IRS says it is seeing more and more identity thieves looking for ways to use legitimate taxpayer identities and personal information to file tax returns and claim fraudulent refunds.

In response, the agency has implemented a comprehensive strategy designed to prevent, detect and resolve ID theft cases as soon as possible. In addition to a continuous law-enforcement crackdown, the IRS has stepped up its internal reviews to spot false tax returns before tax refunds are issued. Of course, in true no good deed goes unpunished fashion, that preemptive tax fraud checking also has slowed down return processing and the issuance of refunds.

The IRS also has a specific division that works with tax ID theft victims -- Identity Protection Specialized Unit -- to help them get their refunds that were stolen along with their identities.

Ways to avoid falling victim: To help you fight back, the IRS also has issued some tips on how you can prevent yourself from becoming a tax scam victim. Beware of:

  • Fictitious claims for refunds or rebates based on false statements of entitlement to tax credits.
  • Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.
  • Internet solicitations that direct individuals to toll-free numbers and then solicit social security numbers.
  • Homemade flyers and brochures implying credits or refunds are available without proof of eligibility.
  • Offers of free money with no documentation required.
  • Promises of refunds for "Low Income, No Documents Tax Returns."
  • Claims for the expired Economic Recovery Credit Program or for economic stimulus payments. 
  • Unsolicited offers to prepare a return and split the refund. 
  • Unfamiliar return preparation firms soliciting business from cities outside your normal business or commuting area.

Yeah, there is a lot to think about at tax season. Not only do you have to worry about getting your return done correctly and in on time, but you also must avoid tax crooks.

You can do it. Just be careful out there!

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Mark Randall

Being a victim to and IRS scam is easier than on may think. New types of scams come out all the time to it is important make sure you know only giving your information to a trusted source.

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