IRS Releases the Top Tax Scams for 2012

WASHINGTON –– The Internal Revenue Service today issued its annual “Dirty Dozen” ranking of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.

The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.

“Taxpayers should be careful and avoid falling into a trap with the Dirty Dozen,” said IRS Commissioner Doug Shulman. “Scam artists will tempt people in-person, on-line and by e-mail with misleading promises about lost refunds and free money. Don’t be fooled by these scams.”

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. The IRS Criminal Investigation Division works closely with the Department of Justice to shutdown scams and prosecute the criminals behind them.

See the full list of all 12 scams here.

Car Donation Wizard recommends, in particular, watching out for the abuse of charitable organization and deductions.

Abuse of Charitable Organizations and Deductions

IRS examiners continue to uncover the intentional abuse of 501(c)(3) organizations, including arrangements that improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets or the income from donated property. The IRS is investigating schemes that involve the donation of non-cash assets –– including situations in which several organizations claim the full value of the same non-cash contribution. Often these donations are highly overvalued or the organization receiving the donation promises that the donor can repurchase the items later at a price set by the donor. The Pension Protection Act of 2006 imposed increased penalties for inaccurate appraisals and set new standards for qualified appraisals.

Car donors who donate a car to one of Car Donation Wizard’s nonprofit partners like Car Talk, Habitat for Humanity, the U.S. Fund for UNICEF or any of our other fantastic nonprofit partners can rest assured that we work only with registered 501(c)(3) organizations. We make sure that each organization maintains the highest quality and ethical standards that you would expect out of your charity organization. Car Donation Wizard encourages donors to research their organizations or choice and let their reputation speak for itself. For more information visit our Charity Selector Page, our FAQ page or our Tax Questions page.

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