BBB releases top 12 tax scams - – Rockford’s News Leader

BBB releases top 12 tax scams


Tax season is in full swing and scammers are taking full advantage.

The Better Business Bureau has released its list of the top 12 tax-related scams in an effort to keep the public aware and safe from fraud.

"These scams are spreading and consumers need to understandthe risk of financial harm that can occur to them by providing personalinformation and sending money to scammers" Dennis Horton, director of theRockford Office of the Better Business Bureau, said. "The best protection is suspiciondon't put your trust in any unknown person who contacts you."

They are:

  1. Phone Scam: Scammers impersonating IRS agents have collected over $1 million from over 20,000 taxpayers. Never give personal information to any strangers over the phone.
  2. Identity Theft: Scammers use someone else's name and social security number to claim refunds.
  3. Phishing: Emails appearing to be from the IRS ask for personal information and money. The IRS never contacts taxpayers through email, social media, or texting. All such correspondence should be forwarded to
  4. "Free Money": Fliers and ads promise "free money" from the IRS, or individuals offer refunds that seem too good to be true. Low-income individuals and the elderly are often targeted and the scammers ask for payment up front. They can then file false returns and disappear, leaving victims with IRS fines and the loss of their up-front payment.
  5. Return Preparer Fraud: Some tax preparers invent children or steal identities. Make sure yours has an IRS Preparer Tax Identification Number. If they don't put that number or sign their name to the form, be aware. Also, watch out for preparers that base fees off your refund.
  6. Hiding Income Offshore: Don't listen to people who tell you to hide money abroad. The IRS has been cracking down on that practice since 2009.
  7. Fake Charities: Scammers create fake charities to fraudulently collect money, especially after disasters. Always verify a charity and make sure your donation is deductible by using IRS's Exempt Organizations Select Check. Also, always use credit cards or checks so you have a record of the payment.
  8. Boosting Income or Expenses: Getting bigger credits than you deserve could end up with you paying back the fraudulent refund and paying interest and penalties on any amount owed.
  9. Frivolous Arguments: Statements saying filing returns are voluntary, only gold-based money is taxable, and your state isn't part of the U.S. are considered "frivolous arguments" and will be rejected by the IRS.
  10. Falsely Claiming No Income: Tayxpayers who fall victim to schemes convincing them to falsely report their taxable income as zero could face a $5,000 penalty.
  11. Evading Taxes: Never listen to anyone who tries to convince you to evade paying your taxes. You can report the incident using Form 14157.
  12. Abuse of Trusts: Schemes recommend transferring money into trusts to reduce income and avoid paying taxes. Rules involving trusts are complicated, so always consult a tax professional first.

You can keep yourself safe by never giving out personal information over the phone, hang up the phone if someone asks you for it, delete suspicious emails, and report the incident at 1-800-366-4484.

You can learn more at

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