Whippany/Princeton, N.J.  – With this year’s tax-return filing deadline tomorrow, the professionals at WithumSmith+Brown (Withum) PC are cautioning the general public to be aware and vigilant of this year’s “Dirty Dozen” tax scams. This year’s popular schemes, as identified by the Internal Revenue Service, include identity theft, telephone scams and phishing.

“While these scams are encountered year-round, they skyrocket in terms of frequency during filing season,” said John A. Smith, Jr., a supervisor and tax specialist based in the firm’s Whippany, N.J. office. “We join the IRS in cautioning the public to be vigilant in protecting their sensitive tax information and financial data.”

Withum’s Eric Cooper also added that many of this year’s IRS scams appeared on the 2017 list as well. “Because of the ‘success’ of these scams last year, they have been refined to be even more effective this year,” he said. “Of course, taxpayers should always proceed with caution and keep in mind that scams are not limited to only those identified in the Dirty Dozen.”

The following are among the 2018 Dirty Dozen’s “more popular” tax scams, according to Smith and Cooper:

  • Phishing Schemes: These involve an unsolicited e-mail or fake website that attempts to attract potential victims to provide personal information. Any suspicious e-mail of this nature should be reported by forwarding it to phishing@irs.gov. Of note: The IRS does not request personal information via e-mail.

Building upon past phishing schemes, there are several new and evolving scenarios, one of which involves one or more taxpayer bank accounts. Criminals are using real bank accounts to directly deposit funds in the taxpayer’s bank account after filing a fraudulent tax return. These criminals then use various tactics to contact taxpayers posing as IRS agents or a representative from a collection agency in order to have unsuspecting taxpayers transfer funds back to the criminal. Taxpayers should review their bank accounts for any unexpected deposits to avoid falling victim to a phishing scheme.

  • Fake Charities: Scam groups often create fake charities and attract contributors by providing a charitable purpose and the benefit of tax deductions. In the aftermath of recent natural disasters, more scam artists are creating fake charities to try and encourage taxpayers to donate to support victims of these events. Prior to making a donation, taxpayers should request the charity’s Federal Employer Identification Number and use the IRS “Select Check” tool to confirm the legitimacy of the charity.
  • Pervasive Telephone Scams: These types of scams involve individuals contacting other individuals pretending to be an IRS representative for the purpose of stealing one’s money and/or identity. Individuals suspecting they have been subject to one of these telephone scams are instructed to contact (1) the IRS if they know they owe or might owe taxes; (2) the Treasury and Inspector General for Tax Administration if they don’t owe taxes; or (3) the Federal Trade Commission’s FTC Complaint Assistant, in either case.

Other scams making the list of the 2018 “Dirty Dozen” encompass return-preparer fraud; inflated refund claims; excessive claims for business credits; falsely padding deductions on returns; falsifying income to claim credits; frivolous tax arguments; abusive tax shelters; and offshore tax avoidance.

Established in 1974, Withum is a national top-ranking public accounting firm providing advisory, tax and audit services to businesses and individuals on a local-to-global scale. Withum also is a member of HLB International, a worldwide network of independent professional accounting firms and business advisers committed to assisting clients to build and expand globally.