Do you know “Dirty Dozen”? Discover the most common tax scams in 2023 and how to protect your finances

Each year, Internal Revenue Service (IRS) of EE. UU publishes a list of the most common tax scams, known as “Dirty Dozen”. These scams can be classic scams or sophisticated schemes designed to convince people that there are ways to avoid their tax obligations. In 2023, the list includes:

1. Employee Retention Credit (ERC): Tax scams related to the ERC application appeared on the list after what IRS calls “flagrant attempt from promoters to deceive non-eligible people of claiming their credit”. The IRS pointed out specifically the tactics used by the promoters who launched radio and internet advertising announcing ERC refunds. Even if you are not eligible for such credit.
2. Phishing y smishing schemes: The cybercriminals pretend to be IRS agents and try to steal information through e-mails or fraudulent texts.
3. Online accounts scam: A third party offers their help to set up an IRS online account, but really, what they want is to steal your information.
4. Fuel tax credit promotion: Certain commercial uses of fossil fuels such as gas or diesel are tax free. But credit is not available for most taxpayers.
5. Fake foundations: the scammers create fake charity organizations, mostly linked to natural disasters, to take advantage of people’s generosity. That means, you must carefully validate the organization where you want to make the donation, before doing it.
6. Suspicious tax preparers: Choose your tax preparer wisely, knowing that you are responsible of the information on your tax declaration.
7. Tax advice on social media: There is plenty of uncertain information on social networks, that could get you into trouble if you prepare your information without properly informing or consulting an expert.
8. Spear-phishing e-mails: Many scammers pursuit to obtain people’s information through the client records of their tax preparers. In this case, is important that the tax preparer takes cybersecurity actions. Also, he/she must be careful about e-mails or communications that may contain suspicious links.
9. Offers in compromise “factories”: You have probably heard publicity along these lines: "If you owe $10,000 or more to the IRS, call for a free tax consultation. We can stop IRS tax liens, garnishments, and wage withholdings". What these companies don't tell you is that their strategy involves an "offer in compromise" or OIC. The IRS says it is an option for those who can't pay the entire tax debt or said payment generates significant financial difficulties. But getting an OIC approved is extremely difficult and many people don’t know it.
10. Schemes that target high-income taxpayers: Promoters seek to alter tax laws or rules to get benefits that reduce their tax payable. In some cases, they offer taxpayers to take advantage of trusts to avoid reporting income or resulting capital gains from the properties sale, in violation of the rules.
11. False strategies to avoid taxes: Promoters offer fraudulent tax schemes that attempt to show taxpayers how to trick the tax system.
12. Offshore accounts and digital assets: Hiding money abroad or holding offshore digital assets can get the attention of the IRS. Especially if you do not declare it correctly.

In conclusion, as taxpayers you must be careful with common tax scams and be extremely careful during tax declaration season. If something seems too good to be true, it probably isn’t.

If you need help preparing and presenting your tax declaration, make sure to look for a trustworthy professional, who is also experienced in the subject.

At Smartkeep, we offer tax services, administration, accounting, and customized solutions for businesses of all sizes. ¡Contact us today to learn more about how we can help you protect your personal and business finances!

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