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The ‘dirty dozen’ tax scams

Marketplace Staff Mar 21, 2008

The ‘dirty dozen’ tax scams

Marketplace Staff Mar 21, 2008


Lisa Napoli: And finally, there’s never been a better reason to get your tax returns off in time. Those hotly debated stimulus checks won’t get to you if you don’t fill out a tax return.

But if you haven’t filed yours yet, a word of caution: Be prepared to avoid some pretty shady characters looking to fleece you out of your hard earned money: Internet scammers.

Every year the IRS releases a list of the “dirty Dozen” tax scams and to help us sort through it, we asked IRS spokesman Victor Olmeczencho to help us out.

Napoli: Victor,the first thing on the list is internet phishing. Tell us how this works:

Victor Olmeczencho: When you hear the word “phishing” you think, oh, you’re out on the lake or out on the ocean trying to catch something to eat or put into your aquarium, but phishing is Internet-based identify thieves. They go around, particularly during tax filing season, to fish for information, to fish for your personal financial information by tricking you into revealing, for instance, your Social Security Number or your bank account number with the promise you’ll get your tax refund quicker.

Napoli: So what might this e-mail look like that I get from a bad guy?

Olmeczencho: It will look like it’s coming from the IRS, but it’s not coming from the IRS, because the IRS does not contact people by e-mail.

Napoli: So this is a more sophisticated ruse than someone calling me up and pretending to be from the IRS? They’re just using the computer. This was the big thing with bank accounts a few years ago.

Olmeczencho: Yeah, yeah Lisa and that’s just a scam.

Napoli: Right. So this is the first year that phishing has been the number one problem. What’s the number two problem because that seems like a very new to this year kind of issue?

Olmeczencho: It’s the scam that’s related to what many people have been hearing about the stimulus, the economic stimulus payment, otherwise commonly referred to as the tax rebate. What the IRS has discovered is that these crooks, besides maybe sending e-mails, they’ve now started posing as IRS representatives and they’re using the phone to call people and to say “Hi. This is the IRS and we want you to give your Social Security Number or your bank account and we will get your special stimulus payment in to your checking account faster,” but what the IRS wants people to know is that we do not make phone calls to you talking about “Hey, give us information and we’ll give you your tax rebate quicker.” We don’t do that. People have to file a 2007 tax year return and then the IRS will look at it and calculate the stimulus payment, if you’re eligable for it.

Napoli: But nobody’s going to be calling me and saying “Hey, what’s the skinny?”

Olmeczencho: Nobody’s going to be calling you from the IRS.

Napoli: OK.

Olmeczencho: Do not believe any of these calls.

Napoli: Now, the number three, on the face of it I don’t understand: frivolous arguments. What does that mean? What do I have to watch out for here?

Olmeczencho: Frivolous arguments. This is arguments that people use saying “based on my reading of the constitution, I don’t have to pay taxes.” They read into the law things that aren’t there that time and time again, the U.S. Tax Court has said “No. Taxes are something that you have to pay if you have taxable income.”

Napoli: So this is a scam against the government, not a scam that I as a consumer have to look out for?

Olmeczencho: It’s a scam against the government, but you want to be sure when you select a tax preparer, and listen, almost all tax preparers… the IRS couldn’t do it’s job if we didn’t have the professional tax preparation community, but, as in any profession, there’s some bad oranges in the bunch and there are sometimes some tax preparers, people who have seminars or workshops and they’re telling you, “oh, you can do this, you can do that, you don’t have to pay taxes, I’ll get your taxes lower if you do this or that” and so they’re really trying to trick you into getting something that you shouldn’t be getting. Basically, if it sounds too good to be true, it is.

Napoli: It is, yeah. Victor, there are 12 things here, we can’t go through every single one of them, but there’s a wealth of information on your Web site, right?

Olmeczencho: That’s right: www.irs.gov You can get all the information you want there about the dirty dozen tax scams, as well as about the economic stimulus payment.

Napoli: Victor Olmeczencho is the spokesman for the IRS here in Los Angeles. Thank you Victor.

Olmeczencho: Oh, thank you Lisa.

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