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Philip L. Liberatore, CPA Highlights the IRS Annual Dirty Dozen List of Scams Directed at Taxpayers

The Internal Revenue Service (IRS) released its 2021 “Dirty Dozen” list of tax scams over the course of four days, urging US citizens to be especially vigilant as fraudsters devise new ways to trick honest taxpayers. “As if the pandemic was not enough of a social and economic burden for the nation, scam artists have made it even more difficult by targeting relief payments and preying on vulnerable groups,” comments Philip L. Liberatore, CPA, a California-based provider of accounting, tax, and financial management services. “In the latest iteration of its “Dirty Dozen” list, the IRS identified 12 instances of what it called ‘nefarious schemes and scams,’ including some that target tax professionals.”

Perhaps unsurprisingly, the first installment of the list was dedicated to pandemic-related scams, the most common threats being stimulus money theft and unemployment compensation fraud, says Philip Liberatore, founder and president of Philip L. Liberatore, CPA. The IRS has introduced additional measures to thwart identity thieves, including the extension of its Identity Protection PIN Opt-In Program to all taxpayers. The second installment focused on personal information cons, with the IRS alerting people to beware of attempts at identity theft through emails, text messages, social media interactions, and phone calls (voice phishing, or “vishing”). Phishing scams tend to surge during tax season, looing to trick tax professionals along with taxpayers. The agency noted, “Phishing scams target individuals with communications appearing to come from legitimate sources to collect victims’ personal and financial data and potentially infect their devices by convincing the target to download malicious programs. Cybercriminals usually send these phishing communications by email but may also use text messages or social media posts or messaging.”

The third category of scams highlighted by the IRS involves “ruses focusing on unsuspecting victims,” which the agency identified as fake charities, scams targeting senior citizens and immigrants, Offer in Compromise (OIC) mills, unscrupulous tax return preparers (typically the so-called ghost preparers), and unemployment insurance fraud. In the final installment of its 2021 “Dirty Dozen” list, the IRS drew attention to “schemes peddled by tax promoters, including syndicated conservation easements, abusive micro-captive insurance arrangements, and other abusive arrangements.” This category includes potentially abusive use of the US-Malta tax treaty, improper claims of business credits, and improper monetized installment sales.

In each annual publication, the IRS provides a detailed list of the scam-warning signs taxpayers should watch out for and offers advice on how to act in case of suspected fraud. “Educating individuals and businesses on predatory practices has been one of our priorities from the very start,” says Philip L. Liberatore, CPA. “We have stepped up these efforts over the past decade as life and work become increasingly digitized, which has opened up new opportunities for entrepreneurial individuals but also provided fraudsters with new ways of scamming honest taxpayers. Working with trusted tax professionals and seeking their advice when a scam is suspected will help people avoid falling victim to unscrupulous agents.”

For more than 30 years, Philip L. Liberatore, CPA has been catering to the tax and accounting needs of companies and individuals across Southern California, helping its clients deal with any financial challenge they encounter. Founded by veteran CPA and entrepreneur Philip Liberatore in 1988, the firm provides a full range of business advisory services, prioritizing personalized care to address the unique issues of each client and ensure the best outcome. Committed to the highest quality of customer service, Philip L. Liberatore, CPA prides itself on being associated with values such as accuracy, timeliness, consistency, integrity, as well as its team’s stellar credentials and continued investment in professional knowledge acquisition.

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