With tax season in high gear next month, the Internal Revenue Service recently released a list of 'Dirty Dozen' tax scams. 

It's important for consumers to know not only are tax scams illegal, penalties include: imprisonment and fines for the scam artist and the taxpayer.  The tax payer gets hurt the most by these scams because they must repay unpaid taxes with interest and other additional penalties.

Here are some of the IRS' 'Dirty Dozen' Tax Scams:

Return Preparer Fraud

When consumers file their tax return with their tax preparer, they expect their tax preparer to be honest and trustworthy.   However, not all tax preparers are honest and those who aren't, end up taking portions of the clients refunds and charge inflated fees etc.

Fortunately, Federal courts are behind the tax payers, issuing injunctions that order tax preparers to stop preparing returns and promoting fraud. The IRS is also taking steps to prevent fraud as well, which includes requiring all paid tax return preparers to register with them, obtain a preparer tax identification number, take competency tests and ongoing professional education

Hiding Income Offshore

On way tax payers avoid paying what they owe to the IRS, is through hiding off shore income.  They do so through brokerage accounts, nominee entities, debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or insurance plans.

The IRS encourages taxpayers with offshore accounts to come forward and resolve their tax matters. By disclosing, taxpayers may lessen the the likelihood of criminal prosecution.

Phishing

Tax payers may get an e-mail claiming to be from the IRS, asking for personal information such as a social security or bank account number. These are obvious scams, but phishing becomes more abundant during the tax season.

The IRS will never send e-mails asking for your personal information, but if you do happen to get one claiming to be from the IRS, e-mails should be forwarded to the IRS mailbox:   phishing@irs.gov

If the e-mail has an attachment, do not open it. It could be malware used to hack into your computer and steal your personal information.

Read the full press release at irs.gov.