The arrival of another tax season has brought a new warning from the IRS about the growing instances of tax fraud. In fact, the agency has added 37 new authentication measures this year to ensure that all returns are legitimate before any refunds go out. But even the increased safeguards can't catch everything, which is why individuals must be diligent to make sure any filings with the IRS are accurate, honest and secure.
The IRS has a well-deserved reputation for cracking down on those who underpay taxes or avoid paying them altogether. But the agency now faces even more sophisticated scams designed to dupe the government or innocent taxpayers. "While tax agencies have always fought tax evasion, the last five to ten years have brought with them a really big increase in refund fraud," says author and tax expert Deborah Pianko. That refund fraud often involves scammers filing returns under stolen identities and then claiming those refunds.
Other experts agree that the feds have struggled to stay ahead of the curve when it comes to enforcing tax law. "The tax code is so complex that even IRS employees don't completely understand it, and every year it gets bigger," says Anthony Parent with the IRS Medic. And even though audits are rare, he warns it's not worth trying to get cute on your taxes. "If you think that the IRS won't discover that you lied to them, you're gambling with your freedom," he says.