As it has done for several years now, the IRS issued an updated list of “Dirty Dozen” tax scams for 2019. For the third year in a row one of the biggest scams is phishing attempts. Phone scams also figure prominently, with criminals making threatening phone calls to innocent taxpayers.
Here are the 2019 Dirty Dozen:
Falsifying income and creating bogus documents (IR-2019-35): This scam involves two types of fraud. The first is falsifying self-employment or wage income to increase the amount of the earned income tax credit (EITC) and other refundable credits that require earned income to qualify. The IRS points out that falsely claiming a deduction or credit that you are not entitled to or falsely inflating income is a crime. Claiming an EITC you are not entitled to may affect your ability to claim the credit in the future. The second scheme involves the filing of fake Forms 1099-MISC, Miscellaneous Income, in which scammers tell taxpayers about a fictitious held-aside account for which the only way to redeem or draw on it is to use some form of made-up financial instrument such as a bonded promissory note that purports to be a debt payment method for credit cards or mortgage debt.
Inflating deductions and/or credits (IR-2019-36): This scam involves unscrupulous tax return preparers or taxpayers themselves who overstate deductions, including charitable contribution deductions, business expenses, or medical expenses, and claim credits that the taxpayer is not…
