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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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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