Watch Out For the Most Common Tax Scams

The IRS unveiled its "Dirty Dozen" recently -- the 12 most tax common scams affecting American taxpayers. And even if you have no intention of defrauding Uncle Sam, the IRS warns that you still need to be careful, especially if you're hiring a tax preparer.

"Don't get taken by scam artists making outrageous promises," says IRS Commissioner Mark W. Everson. "If you use a tax professional, pick someone who is reputable. Taxpayers should remember that they are ultimately responsible for what is on their tax return even if some unscrupulous preparers have steered them in the wrong direction."

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Alan Kopit, legal editor for, says you could be financially and criminally liable for any mistakes on your tax returns. "If you're audited, you'll have to go through the procedure and pay whatever you owe, including interest. There could be criminal liability."

A common abuse this year is the request for improper amounts of the special telephone-tax refund. The IRS reports that it has received returns in which taxpayers requested a refund of their total phone bills rather than just the 3 percent tax on long-distance calls.

"Some preparer has told them that's OK," says Kopit. "A great problem that occurs this time of year is tax-preparation fraud generally. They're going to promise you heaven and earth to get your business -- and they'll charge even higher fees."

In fact, tax-preparer fraud is No. 6 on the IRS list. Be especially wary of "storefront" taxpayer places, warns Kopit, that open up around Feb. 1 and are gone after April 14. They could make off with excessive fees for filing your taxes, leaving you with fraudulent claims. What's worse, Kopit says, is that your identity could be at risk.

"Even if they file a legitimate return, they have all sorts of information on you that they can use on April 16."

Kopit says that if you do suspect your preparer has mishandled your taxes, you should have another reputable preparer review your returns and file and amendment form with the IRS immediately. He also suggests seeking references from family and friends when hiring a preparer in the first place.

Read the complete Dirty Dozen list on the IRS Web site.

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