There’s a new income tax scam you should be aware of.  The IRS is warning taxpayers, especially senior citizens, to beware of a scheme tempting them to file tax returns claiming fraudulent refunds.

The scheme promises tax refunds to people who have little or no income and normally don’t have a tax filing requirement.  They claim they can obtain a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit.

The IRS has seen a surge of these scam from all across the United States. They are aggressively investigating the source of the scheme

“This is a disgraceful effort by scam artists to take advantage of people by giving them false hopes of a nonexistent refund,” said IRS Commissioner Doug Shulman. “We want to warn innocent taxpayers about this new scheme before more people get trapped.”

In many of these cases, con artists are targeting seniors, people with very low incomes and members of church congregations, with promises of free money. They claim refunds are available even if the victim went to school decades ago.

The IRS has already detected and stopped thousands of these fraudulent claims. Nevertheless, the scheme can still be quite costly for victims. Promoters may charge exorbitant upfront fees to file these claims and are often long gone when victims discover they’ve been scammed.

Taxpayers need to remain vigilant regarding tax schemes.

No taxpayer ever wants to be selected for a tax audit. But if you are selected for an audit there are some facts you should know it.  Here are some true facts about the IRS audit process, directly from the source.

First and foremost, the IRS will never contact you, your tax preparer or your tax attorney via e-mail about an impending tax audit. IRS rules require they contact you and your tax preparer via phone or U.S. mail if you are selected for an IRS audit.

Let’s say that your tax attorney or tax preparer recommended you file an amended tax return. That filing will not affect the audit selection process of the original tax return. But be aware, the amended tax return also goes through the normal tax return screening process and could be selected for audit.

I’m sure the biggest fact you want to know about is how the IRS tax audit selection process works.  The first step in the audit screening process is they review your data against normal returns. The IRS uses statistically tax return models that screen out returns that stand out against the “norms”. These returns are selected as part of the National Research Program which the IRS conducts to update return selection information.

Once the tax return has been identified as a possible audit candidate, it is reviewed by an experienced IRS auditor.  The auditor can accept the file as is, or based on his audit experience, note the questionable item and forward the tax return for assignment to an examining group.

The hard cold fact about the tax audit selection process, is it comes down to a “human” (IRS auditor) decision.

If you are selected for a tax audit by mail or in-person, it is recommended you contact your tax preparer and/or a tax attorney for representation.

For more IRS audit facts, visit the IRS website.

The IRS has broadcasted a warning to all taxpayers to be alert for income tax scams. Although these tax scams are around all year, they peak around tax filing season. The so-called dirty dozen tax scams range from identity fraud to tax preparer fraud.

“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.”

Taxpayers need to understand that tax scams could lead to tax penalties, interest charges and even criminal prosecution.

Here are the Dirty Dozen Tax Scams the IRS is warning you about (republished verbatem from the IRS website.

1. Identity Theft
   Topping this year’s list Dirty Dozen list is identity theft. In response to growing identity theft concerns, the IRS has embarked on a comprehensive strategy that is focused on preventing, detecting and resolving identity theft cases as soon as possible. In addition to the law-enforcement crackdown, the IRS has stepped up its internal reviews to spot false tax returns before tax refunds are issued as well as working to help victims of the identity theft refund schemes.Identity theft cases are among the most complex ones the IRS handles, but the agency is committed to working with taxpayers who have become victims of identity theft.

   The IRS is increasingly seeing identity thieves looking for ways to use a legitimate taxpayer’s identity and personal information to file a tax return and claim a fraudulent refund.

   An IRS notice informing a taxpayer that more than one return was filed in the taxpayer’s name or that the taxpayer received wages from an unknown employer may be the first tip off the individual receives that he or she has been victimized.

   The IRS has a robust screening process with measures in place to stop fraudulent returns. While the IRS is continuing to address tax-related identity theft aggressively, the agency is also seeing an increase in identity crimes, including more complex schemes. In 2011, the IRS protected more than $1.4 billion of taxpayer funds from getting into the wrong hands due to identity theft.

   In January, the IRS announced the results of a massive, national sweep cracking down on suspected identity theft perpetrators as part of a stepped-up effort against refund fraud and identity theft. Working with the Justice Department’s Tax Division and local U.S. Attorneys’ offices, the nationwide effort targeted 105 people in 23 states.

   Anyone who believes his or her personal information has been stolen and used for tax purposes should immediately contact the IRS Identity Protection Specialized Unit. For more information, visit the special identity theft page at www.IRS.gov/identitytheft.

2. Phishing
   Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. Armed with this information, a criminal can commit identity theft or financial theft.If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov.

   It is important to keep in mind the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information that can help you protect yourself from email scams. More on Don’t Get Duped By The Dirty Dozen Tax Scams