Each year, the Internal Revenue Service compiles a list of the 12 most common, dangerous or costly tax scams. They call this list their “dirty dozen” and recommend that taxpayers stay vigilant during tax season. We will summarize these twelve scams for you, and highlight the steps you should take to protect yourself.
A fraudulent practice the IRS warns taxpayers to avoid is falsely padding deductions on returns. Shady tax preparers overstate many common deductions when looking to guarantee a larger refund, or the taxpayer may try to lower their personal tax burden. This practice is tax fraud and may lead to an audit and other penalties. Do not claim charitable contributions you have not made, or claim family and business tax credits you do not qualify for. The taxpayer is always responsible for the content of the submitted return and may face penalties even if someone else prepares the return.
The IRS recommends using tax preparation software to avoid audits. Low-income taxpayers may qualify for free tax preparation software, and the IRS provides Free File for federal taxes. They also suggest preparing your taxes with community volunteers, free to low-income or non-English speaking taxpayers. There are many legitimate options for tax preparation, and the IRS has created a page for those who need help completing their returns.