Drum roll, please. The No. 1 worst tax scam this year is identity theft.
The IRS says more identity thieves are looking for ways to get their hands on taxpayers' personal information. Once they do, they typically file a tax return as the unsuspecting taxpayer and claim a fraudulent refund.
The victimized taxpayer often doesn't realize there's a problem until he files his return. That's when the legitimate filer gets an IRS notice informing him that more than one return was filed in his or her name and the refund has been sent to someone else.
To fight growing identity theft concerns, the IRS has implemented a variety of anti-fraud methods, including stepped-up internal reviews to spot false returns before tax refunds are issued. In 2012 alone, the IRS kept more than $20 billion worth of refunds from going to criminals who had tried to claim the money by filing false returns.
When a tax ID theft does occur, a dedicated IRS division works with victims to get them their proper refunds as quickly as possible.
If you believe your personal information has been stolen and used for tax purposes, contact the IRS Identity Protection Specialized Unit.