The Tax Scams You Don't Want to Mess With

Tax identity theft is a growing problem nationwide and the Internal Revenue Service has stepped up its efforts to crack down on this pervasive and growing type of fraud.

There are a large number of tax scams that affect consumers every year, with identity theft topping the list once again, but phishing and fraud committed by preparers are also something to keep an eye out for, according to the IRS's annual Dirty Dozen tax scams release. Last year alone, the agency's systems for detecting fraudulent filings saved taxpayers some $20 billion, up from $14 billion the year before. Currently, the IRS has some 3,000 of its employees working on cases related to identity theft, more than double the number committed to the task just less than two years ago. Moreover, it also has trained more than 35,000 of its employees to help consumers deal with identity theft concerns.

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Beyond tax-related identity theft, the IRS is also warning consumers of phishing scams by criminals who send unsolicited emails or links to attack websites designed to look like those that might have been sent by the tax collecting body itself, the report said. These are often used to glean personal or financial data on intended victims, which can in turn be used to commit more general identity theft related to a person's credit or finances. For this reason, the agency warns that people receiving unsolicited messages from anyone claiming to be affiliated with the IRS or an associated entity should report it as soon as possible. No reputable agency or organization would ever contact a person to request this type of information without the consumer making first contact.

Taxpayers also need to be on the lookout for potentially fraudulent tax preparers, the report said. Every year, about 60 percent of Americans hire someone to help them file their taxes, but unless they're sure the person or company is reputable, they might be putting themselves at risk for identity theft or tax return fraud. Making sure to properly vet any tax preparer, or finding one through the IRS's website, is the best defense against this type of crime.

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Of the more immediate impacts of these crimes is that taxpayers's refund could get delayed -- and significantly.  But they can also have deeper implications on a person's credit reports, and on their overall financial standing if these crimes aren't discovered and resolved before serious damage is done.

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