Tax Scams

Don't fall victim to tax scams. Remember that if it sounds too good to be true, it probably is. If you think you're being scammed, you can report suspected tax fraud activity by sending completed Form 3949-A, Information Referral, to Internal Revenue Service, Fresno, CA 93888. You can download the form or call 1-800-829-3676 to order by mail.

Some of the common scams the IRS sees include:

• IR-2008-41, Phishing Scams, Frivolous Arguments Top the 2008 “Dirty Dozen” Tax Scams
  
  
• IR-2007-61, IRS Identifies 40 Frivolous Positions for Taxpayers to Avoid
  
  
• IR-2007-37, Fraudulent Telephone Tax Refunds, Abusive Roth IRAs Top Off 2007 “Dirty Dozen” Tax Scams

• IR-2006-25 , IRS Announces “Dirty Dozen” Tax Scams for 2006
  
  
• Employment Tax Schemes (IR-2004-47)
  
  
• Misuse of "Corporation Sole" Laws for Religious Organizations (IR 2004-42)
  
  
• Offering to Help Obtain Tax Benefits — targets have included military families (IR-2003-63)
  
  
• Schemes involving Medical Professionals — FS-2004-115 and FS-2003-12
  
  
• Schemes Promoting Use of Disabled Access Credit (IR-2002-17)
  
  
• Home-Based Business Tax Avoidance Schemes (IR-2002-13)
  
  
• Slavery Reparation Scams (IR-2002-08) and court cases involving such scams (FS-2002-08)

Related Items:

• Fact Sheet 2004-12, Tax Return Errors and Frivolous Tax Arguments — an overview of IRS warnings and technical guidance on frivolous positions.
• Tax Scams — How to Recognize and Avoid Them
  Education is the best way to avoid the pitfalls of these “too good to be true” tax scams.
• Criminal Investigation's Tax Fraud Alerts

Phony Arguments

No matter how some things are sliced, they're still baloney. If someone tells you that you don't have to pay taxes, check out The Truth About Frivolous Tax Arguments. This IRS.gov exclusive addresses some of the more common false "legal" arguments made by those opposed to compliance with the federal tax laws. Each contention is briefly explained, followed by a discussion of the legal authority that rejects the contention. The second section deals with frivolous arguments encountered in collection due process cases. The final section illustrates penalties imposed on those pursuing frivolous cases.

IR-2004-41 describes the increasingly strong penalties the courts have imposed from March 2003 to March 2004 on taxpayers who pursued frivolous cases to delay IRS collection actions.

IR-2003-28 details penalties the Tax Court imposed from April 2001 until early March 2003 for making frivolous Collection Due Process arguments.

Credit Counseling Organizations

The IRS is concerned that some organizations are using their tax-exempt status to skirt consumer protection laws. Get the details through this IRS consumer alert.

Identity and Financial Theft Scams

The IRS has issued several recent consumer warnings on the fraudulent use of the IRS name or logo by scamsters trying to gain access to consumers’ financial information in order to steal their identity and assets. Scamsters will use the regular mail, telephone, fax or e-mail to set up their victims. When identity theft takes place over the Internet (e-mail), it is called phishing.

Bogus E-mail, Web site — In IR-2005-136, the IRS warned of an e-mail-based scheme that sent recipients to a phony site that mimicked an IRS.gov page in an attempt to trick recipients into revealing their Social Security number and credit card account and PIN numbers. [Nov. 30, 2005]

Non-resident Aliens with U.S. Income — Using fictitious correspondence and an altered IRS Form W-8BEN, this scheme tries to get personal and financial data from foreign nationals. IR-2004-104 [Aug. 3, 2004] and IR-2004-75 [June 1, 2004] have details.

Bogus E-mail, Web site — In IR-2004-60, the Treasury Department and the IRS warned of an e-mail-based scheme that attempts to trick recipients into revealing personal information such as social security numbers, driver’s license information and bank and credit card numbers. [April 30, 2004]

Phony Bank Scam — A 2002 scam used phony bank correspondence and IRS forms to trick unwary customers into disclosing their personal and financial information to the scam promoters. The information was used to steal the customer's identity and bank account deposits, run up charges on credit cards, apply for loans, services or benefits in the customer's name, file fraudulent tax returns and more. The phony IRS forms used in this scam were labeled W-9095, W-8BEN or W-8888. IR-2002-55 has more details.

Report instances of this fraud to the Treasury Inspector General for Tax Administration at 1-800-366-4484.

The Comptroller of the Currency issued Alerts 2002-3 and 2002-6, warning of this identity theft scam and including copies of phony bank correspondence and the phony W-9095. These are on the 2002 Alerts page of the Comptroller's Web site.

Learn more about identity theft.