The IRS Issues Update to the Scams to Be Aware of for 2023 and Beyond

• Learn about the IRS’ “Dirty Dozen” list of scams for 2023 and beyond.
• Discover information about the “False Fuel Scam.”
• Beware of scams involving fake charities.
• Find a list of additional scams the IRS warns of.

When it comes to income taxes, two things tend to be true every year. The first is that April will always roll around yet again, whether you like it or not. This means that it's in your best interest to make sure your tax filing needs are accounted for. The second is that with this period of the year always comes scams with malicious intent that can do you harm.

Over the years, the IRS has issued clear guidance on how to help people avoid getting scammed. Nobody from the IRS will ever contact you by telephone or email to demand money, for example. If you legitimately owe something (or if the government thinks you do), the IRS will contact you via the USPS.

But at the same time, scammers are nothing if not sophisticated. One must be proactive about staying vigilant or else you might fall directly into their trap. That's part of what the IRS wants to help people do. So, they've recently issued an update to what they call the "Dirty Dozen" tax scams.

The Dirty Dozen Tax Scams: Breaking Things Down

As the name implies, the IRS' "Dirty Dozen" is an annual list of the common tax-related scams people may encounter at some point throughout the year. They significantly increase in prominence as the filing season approaches. These scams put people at risk of losing critical money. However, they also could compromise someone's personal information, their data, and much more.

As a rule, people should never share sensitive personal information with someone over the phone, via email, or on social media. Most of these scams depend on people not realizing this simple truth.

The Scams to Watch Out For

One of the scams that the IRS is warning people about for 2023 and beyond has to do with aggressive claims as they relate to the Employee Retention Credit. At some point, you may have heard a promotion on the radio or seen an ad online from someone claiming that they can help you save a tremendous amount of money on your taxes by way of the Employee Retention Credit.

Unfortunately, they're almost always based on inaccurate information regarding who is eligible to even take the credit in the first place, how much money you can get in the way of credit if you are, or likely both at the same time.

Phishing and smishing are also two techniques that are on-the-rise recently. This involves a situation where fake communication has begun between a taxpayer and someone posing as a legitimate organization in the financial community. It could involve a call from someone claiming to be from the IRS, from what sounds like a legitimate tax preparation service, or a similar type of entity.

If these messages arrive in the form of a text message you didn't sign up for or weren't expecting, we call that smishing. If they come in the form of an email, we call that phishing. Regardless, they're little more than a social engineering attempt to try to get someone to provide personal and financial information. Scammers will almost always use this information to steal someone's identity.

Additional Tax Scams to Watch Out For

Another common type of tax credit scam takes the form of the "False Fuel Scam." This targets businesses that may have vehicles or other equipment used for official purposes. Scammers will promise taxpayers that they can get bigger refunds than they were expecting by claiming yet another credit that they probably aren't eligible for in the first place.

Do you meet the eligibility requirements for the Credit for Federal Tax Paid on Fuels? Then you can claim it by filling out Form 4136. If anyone tells you differently, they're likely trying to take advantage of you.

One sad type of tax-related scam that people should be aware of has to do with fake charities. Certainly, this is nothing new. Someone calls you to ask you to donate money to help with disaster relief or a similar cause. Unfortunately, they never use the money you send for those purposes.

However, recently scammers have begun trying to get both money and personal information. So not only could you lose hard-earned income, but you could also open yourself up to a case of identity theft as well.

Also keep in mind that if you do donate to a charity (or to an organization that you think is a legitimate charity), you can only claim the donations if they go to a qualified tax-exempt organization. Simply asking such a caller about their status could weed out some of the illegitimate organizations trying to contact you. It also may be better to refuse to make a donation over the phone.

More IRS advice

Other examples of scams that the IRS wants to make people aware of this year include but are not limited to ones like:

• Situations where an unknown third party reaches out to try to help you with your IRS Online Account.
• Untrustworthy tax preparers who want to take advantage of you.
• Bad advice that you see on social media.
• "Offer in Compromise" mills that aren't acting on behalf of the IRS or associated with it in any way.

Do you feel comfortable handling your taxes yourself? If you have complicated taxes or if you're a business owner, you shouldn't. If nothing else, these and other tax scams underline the importance of making sure your taxes are handled appropriately by a professional. Also, do your due diligence to ensure you're getting help from a trustworthy professional.

They can help make sure your taxes are filed correctly. They can also spot these scams more easily to help you avoid them. For many people, this is the most important benefit of all.

Have questions about scams or need advice? Call Fiducial at 1-866-FIDUCIAL or make an appointment at one of our office locations to discuss your situation.

Ready to book an appointment now? Click here. Know someone who might need our services? We love referrals!