This year's IRS Dirty Dozen tax scam list the IRS released has identity theft as the number one tax scam in the country, just like 2012. Even though the IRS claims to have made efforts to curb identity theft, the country still loses billions of dollars in tax scams each year. Informing taxpayers about the various tax scams is a helpful way to counter tax fraud.
Problems the IRS Faces
It is difficult to catch identity thieves because of their distance from the victim. Most identity thefts are carried out over the internet or phone. After extracting personal and financial information, the scammers disappear without a trace. Therefore, the IRS focuses on spotting fraudulent tax returns when they reach the office for review.
How Identity Theft is Conducted
Phishing is second on the list of tax scams. It is simple to carry out identity theft through the internet by creating fake websites and sending unsolicited emails to incite taxpayers to share their tax information. As anonymity can easily be achieved in the digital world, it is usually a taxpayer's awareness that saves them from falling victim to identity theft.
Using a taxpayer's financial and personal information, scammers have been known to empty bank accounts, file false tax returns on behalf of taxpayers and claim huge refunds, and commit other financial crimes.
How You Can Save Yourself
It is best for taxpayers to protect themselves against identity theft by using only legitimate sites, avoid sharing their financial and personal information on the internet, and investigating suspicious websites/companies before submitting any information to them.
Scammers use the names of legitimate institutions to trick taxpayers into trusting them. Unsolicited emails that ask to act immediately are mostly a trap. Instead of clicking on the links of such emails, it is better to call up the institution to inquire about the legitimacy of the claims made in the email.
With all the efforts the IRS is making, at the end it is up to taxpayers to save themselves from identity theft.
Labels: Identity Theft, IRS, Tax Filing, Tax News, Tax Refunds, Tax Scams, Taxpayers