The IRS Dirty Dozen Tax Scams: Return Preparer Fraud

Each year, the Internal Revenue Service releases a list of the 12 most popular tax scams for the year. The 2008 list is out, and I thought it would be fun to go through them individually to show you how criminals are trying to take advantage of taxpayers. The basic idea behind all of these scams is simple: prey on a taxpayer's fear of the IRS or their desire to avoid paying taxes.

Use the information here to help avoid being taken advantage of by a scammer who wants your money. And use this basic rule of thumb for any offer or communication regarding taxes: If it sounds too good to be true, it probably is. Don't get fooled by claims regarding mysterious refunds or tax bills. When in doubt contact the IRS directly for help with your situation.

Yes, it's true that tax return preparers can and do commit fraud. They can help taxpayers commit fraud by advising them on how to skirt the laws. But they can also commit fraud in ways that harm the taxpayer, and the taxpayer might not even realize it. Those can include charging inflated fees or stealing a portion of your refund. That's why it's important to look for reputable tax preparers who come with good recommendations. Be wary of fly-by-night operations or tax advice that sounds highly unusual or too good to be true.