IRS Summarizes “Dirty Dozen” List of Tax Scams for 2017

April 11, 2017

April 15th is right around the corner, which means consumers will spend the coming weeks preparing their taxes. However, this time of year also sees a spike in the number of tax-related crimes. Fraudsters take advantage of consumers to gain access to the plethora of personal information available in tax documents - like a Social Security Number, address and date of birth - to commit identity theft for financial gain.

Identity theft is just one of The Internal Revenue Service's "The Dirty Dozen," a list of the 12 most common tax scams committed in 2017. The IRS implored taxpayers to review this list to protect their personal information from criminals.

"Taxpayers can and should stay alert to new schemes which seem to constantly evolve. We urge them to do all they can to avoid these pitfalls – whether old or new," noted IRS commissioner John Koskinen.

Phishing continues to rise

The IRS cited phishing attacks as a continuing concern. Taxpayers may receive emails with malicious links that can infect their computers or capture personal information. Duo Insight, a phishing assessment from Duo Security, released results of its latest phishing attack test from over 11,000 employees: It found that one-third of employees click on malware links via email - and an additional 17 percent input sensitive login information.

Consumers eager for news about their tax refunds may fall victim to this as criminals try to extract payment from taxpayers via email - and insist on taxpayers providing personal information, which they can later use to commit identity theft.

To battle this, the IRS teamed with tax professionals to create stronger barriers against identity theft. These include developing a multi-step authentication process by including 37 new data elements for individuals and 32 data elements for business filers. In addition, the IRS will send an additional 48 million Form W-2 verification codes, to positively identify taxpayers and prevent fraud.

Phone scams top IRS list

These phone scams involve criminals impersonating IRS agents and aggressively demanding personal information or payment. They may do this in conjunction with a phishing email to lend an air of legitimacy to their efforts. However, the IRS insisted that they do not reach out to taxpayers by phone demanding payment.

"We continue to say, if you are surprised to be hearing from us, then you're not hearing from us," said Koskinen.

How do you know if the call isn't real? The "agent" may demand payment immediately or through a prepaid debit card. They may threaten court action if you do not comply. However, this is a scare tactic to push you to make payments immediately. If you believe you're being targeted by a fraudster, the IRS suggested hanging up immediately, then reach out to the Treasury Inspector General for Tax Administration to report the incident.

When you are taking steps to protect your identity, it's always good to have another person working to protect your identity, especially around tax time. That's where Identity Guard can help. It offers a personal privacy protection plan - and it can help you find the plan that fits your lifestyle to protect your identity all year round.

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