With barely a month to go before tax filing deadline, identity theft, phone scams, and phishing top the IRS’ annual “Dirty Dozen” tax scams for 2016. These email, phone, and texting scams, designed to trick taxpayers into sharing personal information that can be used to file for fraudulent refunds, have surged 400 percent in this tax season alone, the IRS warns.

These tax scams are being reported in every part of the country, according to the IRS. Phishing scams spotted by the IRS ask taxpayers about a wide range of topics, including information related to refunds, filing status, personal information (address, phone number, and Social Security number), ordering transcripts, and verifying PIN information.

"The dramatic jump in these scams comes at the busiest time of tax season," said IRS Commissioner John Koskinen. He urges consumers to beware of fraudsters “trying to confuse people at the very time they work on their taxes."

Tax Scams to Watch For

This year’s tax scams lineup includes:

  • Identity theft. The No. 1 scam this year is tax-related identity theft, which the IRS defines as someone using a taxpayer’s stolen Social Security number to file a return and claim a fraudulent refund.
  • Phone tax scams.  Phone calls from criminals impersonating IRS agents remain an ongoing threat. The IRS has seen a surge of these phone tax scams in recent years as scam artists threaten taxpayers with police arrest, deportation and license revocation, among other things.
  • Phishing. Phishing emails and text messages appear to come from the IRS and direct consumers to go to what resembles an official website, such as IRS.gov. The sites also may carry malware, which can infect people's computers and allow criminals to access your files or track your keystrokes to gain information. “The IRS won’t send you an email about a bill or refund out of the blue,” said Koskinen. If you receive a suspicious email, forward it to phishing@irs.gov.
  • Return preparer fraud. While the vast majority of tax professionals provide honest high-quality service, the IRS warns of “dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers.” It happens frequently enough that this scam makes it onto the “Dirty Dozen” list every year.
  • Offshore tax avoidance. Hiding money or income in offshore accounts in order to avoid paying U.S. taxes is among the enduring tax scams.
  • Inflated refund claims. This scam, closely related to return preparer fraud, fools consumers into believing preparers who promise a big refund. Inflated refund claims often involve claims for tax credits that taxpayers are not entitled to, such as education credits, the earned income tax credit, or EITC, and the American opportunity tax credit. Scam artists use flyers, advertisements, phony storefronts and word of mouth via community groups to find victims.
  • Fake charities. Groups masquerade as charitable organizations to attract donations from unsuspecting contributors. Fake charities often use names similar to well-known organizations and may set up fake websites, which can steal your credit card number and other personal information. Charity tax scams tend to increase in the wake of large-scale natural disasters, so don’t make any contributions without checking first with the IRS or one of the three major charity watchdogs: The BBB (Better Business Bureau’s) Wise Giving AllianceCharity Navigator, and CharityWatch.
  • Falsely padding deductions on returns. New this year to the “Dirty Dozen” list, this scam consists of consumers falsely inflating deductions, such as charitable contributions, or expenses on their returns to under-pay what they owe or possibly receive larger refunds.
  • Excessive claims for business credits.  Taxpayers claim the fuel tax credit, research credit, or other business credits without satisfying the proper requirements.
  • Falsifying income to claim credits. Shady tax preparers sometimes talk taxpayers into falsifying their income to qualify for the Earned Income Tax Credit. The penalty is big bills in back taxes and interest, and sometimes even criminal prosecution. 
  • Abusive tax shelters. If a complex tax avoidance scheme sounds too good to be true, it probably is. 
  • Frivolous tax arguments. Don’t even think of using unreasonable or outlandish claims to avoid paying taxes. The IRS doesn’t have a sense of humor, witnessed by the penalty for filing a frivolous tax return: $5,000. 

While these “dirty dozen” scams can be encountered at any time of the year, the IRS reports that they peak during tax season

Our tax guide can help save you time and eliminate tax-prep hassles—and our advice might even help you get a bigger refund.

How to Avoid Tax Scams