12 Dirtiest Tax Schemes
Beware of these sneaky tax day scams.
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Protect Your Assets - The IRS warns that tax payers must be especially skeptical of too-good-to-be-true offers that could set them up to become victims of identity theft and fraud among other crimes. Keep reading for a breakdown of the sneakiest tax scams to avoid. — Britt Middleton (Photo: REUTERS/Rick Wilking /Landov)
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Identity Theft - Identity theft occurs when someone uses your personal information such as your name, Social Security number (SSN) or other personal information without your permission, such as filing a fraudulent tax return, and claim a refund in your name. Click here to learn about ways you can secure your personal information or contact the IRS as soon as possible if you feel you may already be a victim of identity theft. (Photo: Getty Images)
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Phishing - Known as phishing, cyber crooks bate unsuspecting victims with the help of unsolicited emails or a fake website that poses as legitimate and prompts them to provide valuable personal and financial information. Be wary of opening emails from recipients you don't know and report any suspicious emails to the IRS at phishing@irs.gov. (Photo: San Jose Mercury News/MCT /Landov)
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Return Preparer Fraud - Do your research about a tax preparer before committing and make sure that they sign the returns they prepare and enter their IRS Preparer Tax Identification Numbers (PTINs). For tips about choosing a preparer, red flags, details on preparer qualifications and information on how and when to make a complaint, visit www.irs.gov/chooseataxpro. (Photo: Tim Boyle/Getty Images)
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Hiding Income Offshore - It is illegal to evade U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities, using debit cards, credit cards or wire transfers to access the funds. To stay on the safe side, the appropriate reporting requirements must be fulfilled in order to avoid penalties, fines and potential criminal charges. (Photo: Reuters)
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There's No Such Thing as "Free Money" - Beware of flyers and advertisements for "free money from the IRS," encouraging taxpayers to make fictitious claims for refunds or rebates based on false statements of entitlement to tax credits. These schemes typically prey on low-income individuals and the elderly. To learn more about tax scams, visit the IRS Consumer Alert page. (Photo: REUTERS/Eric Thayer)
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Impersonation of Charitable Organizations - Be wary of charities with names that are similar to familiar or nationally known organizations (click here for the IRS' guide to tax-exempt organizations) and don’t give out personal financial information, such as Social Security numbers and bank account pass codes. (Photo: Tom Pennington/Getty Images)
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Fraudulent and Inflated Income and Expenses - Claiming income you did not earn or expenses you did not pay in order to secure larger refundable credits such as the Earned Income Tax Credit can lead to repayment of fraudulent refunds, penalties and possibly criminal prosecution. (Photo: Comstock/Getty Images)
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False Form 1099 Refund Claims - In this scam, a person may encourage an individual to file a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return. You can still be held liable for financial penalties and potential criminal charges. (Photo: Courtesy of The Internal Revenue Service)
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Frivolous Arguments - Scammers may try to encourage you to use any number of offenses to avoid paying the taxes you owe. The IRS has a list of frivolous tax arguments that taxpayers should avoid. (Photo: Detroit Free Press/MCT /Landov)
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