As peak tax season approaches, many Americans are gathering their tax documents and preparing for the effects -- both good and bad -- of the Tax Cuts and Jobs Act on their returns. Many will likely ponder, given the newly increased standard deduction, whether itemizing their taxes is still their best financial move. Along with the questions surrounding the nuts and bolts of a return, there are other, more malevolent issues that demand taxpayers' attention: How to avoid falling victim to tax scams.

As an economic crimes detective, I have seen firsthand the devastation that these crimes cause victims and their families, and I have personal experience consoling individuals who have lost their life savings and whose family relationships have been strained.

A personal check made out to the I.R.S. in the amount of "All my money"

Always check your tax preparer's credentials and make sure you know what fees they charge before hiring them. Image source: Getty Images.

The "Dirty Dozen"

While it is notoriously difficult to accurately gauge how many victims have fallen prey to these scams and how much money has been lost, there is no question that the numbers are huge. The Internal Revenue Service (IRS) on its website states that "thousands of people have lost millions of dollars and their personal information to tax scams." That's putting it mildly. Just one tax-fraud ring, consisting of 21 conspirators and broken up last year by the U.S. Department of Justice, was responsible for 15,000 victims and "hundreds of millions" of dollars in losses alone.

Every year, the IRS releases their "Dirty Dozen" list of tax scams, which "highlights a wide variety of schemes that taxpayers may encounter throughout the year, many of which peak during tax-filing season." While I would definitely encourage you to look over the entire list, don't feel as though you need to memorize each individual scam. Instead, here are three principles that can help you avoid all manner of tax scams and keep yourself from becoming a victim.

1. Beware suspicious phone calls and emails

One of the most common tax scams involves fraudsters calling a potential victim claiming to be from the IRS. The caller matter-of-factly demands that the victim pay back taxes that are owed, or law enforcement will arrive shortly to arrest the victim.  

Another common scam entails phishing emails, which are designed to get you to reveal personal information about yourself. The IRS has seen an increase of scams involving emails that direct victims to websites with fake log-in pages. Sometimes these emails are designed to look like they are from trusted organizations. Other times, they can even be legitimate email accounts that have been hacked, all to get victims to "provide money, passwords, Social Security numbers and other information that can lead to identity theft." 

Fortunately, these are easy scams to avoid if you remember this one crucial detail: The IRS will never call, email, or contact you via social media without mailing you first. Nor will they ask for payment methods, financial information, or personal information through these channels. Finally, remember that the IRS will never threaten you with arrest or demand immediate payment for back taxes without giving you ample opportunity to appeal. 

2. Choose a tax preparer carefully

If you are one of the millions of taxpayers who will pay someone else to help you prepare your taxes this year, make sure to do your homework first. Two of the scams that make the "Dirty Dozen" list involve hiring unscrupulous accountants or tax preparers. While most tax preparers are honest professionals, there is a definite subset who will falsely advertise or promise impossibly high returns if you use them. Unfortunately, the victims find out too late that the person they hired took off with all or a high percentage of their refund as "fees" for their services, or used false information to fill out the return.

To avoid this type of scam, you need to make sure you hire a competent tax preparer. You can do this largely by following the same practices you would follow for hiring other professionals:  

  • Check their credentials and qualifications. You might want to prioritize the tax preparers that are certified public accountants, attorneys, or enrolled agents with the IRS. The IRS provides an online directory where you can search for preparers with different qualifications near you.
  • Read online reviews of their services. If you can't find online reviews for a specific preparer, that should be considered a red flag.
  • Check the person or organization through the Better Business Bureau.
  • Always review your tax return before it is filed. If you have any questions or something doesn't seem right, ask about it. Never sign a blank return.
  • Ask about fees upfront. The IRS unequivocally states, "Avoid preparers who base fees on a percentage of their client's refund or boast bigger refunds than their competition."
  • Finally, you can always request to see a preparer's IRS-issued PTIN -- the Preparer's Tax Identification Number. All paid preparers are required to register with the IRS and receive this number.

3. Be honest

Sadly, several of the points on the "Dirty Dozen" list are warnings to consumers to not file false returns. This can range from falsely padding business expenses to claiming extra dependents, but regardless of the specifics, the reward is never worth the risk it entails.

Stay a step ahead

It can be easy to think you will never fall for these types of scams. But remember, criminals know how to emotionally engage and trigger a targeted victim. Scams almost always play off one of two emotions: fear or greed.

When offered an unexpectedly large refund that you need badly for car repairs or next summer's vacation, you might be tempted to ignore the red flags going off in your brain and hire that tax preparer who's handing out fliers.

When a purported IRS agent calls and tells you to pay back taxes with gift cards in the next half-hour or you're going to jail, it can be truly frightening. It's hard to take a step back and remember that the IRS doesn't operate like this.

That's why it's most important to keep your wits about you, take your time, and verify with a trusted source before making any rash decisions. If you can remember the principles above, you will be a step ahead of fraudsters and can drastically reduce your chances of falling victim to a scam this tax season.

The Motley Fool has a disclosure policy.