Protect Yourself From Tax-Related Fraud Tax-related fraud schemes have been on the rise for years. From identity theft, to fraudulent tax preparers, to fake tax bills, the schemes are varied and creative. But they all count on one thing: your lack of knowledge of tax laws and the inner workings of tax agencies. The information below will help taxpayers understand potential fraud schemes. Understanding how the schemes work will make it easier for you to avoid them. Identity Theft – Learn how criminals steal your identity and use it to file fake tax returns and steal your tax refund. Impersonating Revenue Employees – Criminals will contact you posing as Revenue agents and demand payment for a bogus tax bill. They will often ask for payment in unusual ways like prepaid debit or gift cards. Fraudulent Tax Preparers – Unscrupulous preparers will prepare an income tax return using incorrect information so you can get a larger refund or for other reasons. But you are the one who is responsible for any mistakes on your return if you sign it. Reporting Tax Fraud – Here is how you can report tax fraud. The Internal Revenue Service also offers information about preventing fraud.