WASHINGTON - The Internal Revenue Service today issued the 2006 â€œDirty Dozenâ€ â€“ its latest annual tally of some of the most notorious tax scams---along with an alert to taxpayers this filing season to watch out for schemes that promise to reduce or eliminate taxes.
Two new schemes have worked their way onto the list in 2006. In recent months IRS personnel have noted the emergence of the two scams -- "zero wages" and "Form 843 tax abatement" -- in which filers use IRS forms to claim that their tax bills have been wrongly inflated.
Also high on the list in 2006 is "phasing," a favorite ploy of identity thieves. Over the past few years, the IRS has observed criminals working through the Internet, posing even as representatives of the IRS itself, with the goal of tricking unsuspecting taxpayers into revealing private information that can be used to steal from their financial accounts.
1. Phasing. Phasing is a technique used by identity thieves to acquire personal financial data in order to gain access to the financial accounts of unsuspecting consumers, run up charges on their credit cards or apply for new loans in their names. These Internet-based criminals post as representatives of a financial institution and send out fictitious e-mail correspondence in an attempt to trick consumers into disclosing private information. Sometimes scammers pose as the IRS itself. In recent months, some taxpayers have received e-mails that appear to come from the IRS. A typical e-mail notifies a taxpayer of an outstanding refund and urges the taxpayer to click on a hyperlink and visit an official- looking Web site. The Web then solicits a social security and credit card number. In a variation of this scheme, criminals have used e-mail to announce to unsuspecting taxpayers they are "under audit" and could make things right by divulging selected private financial information. Taxpayers should take note: the IRS does not use e-mail to initiate contact with taxpayers about issues related to their accounts. If a taxpayer has any doubt whether a contact from the IRS is authentic, the taxpayer should call 1-800-829-1040 to confirm it.
2. Credit Counseling Agencies. Taxpayers should be careful with credit counseling organizations that claim they can fix credit ratings push debt payment plans or impose high set-up fees or monthly service charges that may add to existing debt. The IRS Tax Exempt and Government Entities Division is in the process of revoking the tax-exempt status of numerous credit counseling organizations that operated under the guise of educating financially distressed consumers with debt problems while charging debtors large fees and providing little or no counseling.