Scamming is alive and well. From a Nigerian prince that needs your help, to identity theft, scamming exists in every facet of our lives. It would come as no surprise then, that scamming is extremely prevalent in taxes. The IRS has identified a number of common tax scams designed to take advantage of tax payers. We will review and advise on how to identify these cons, so you can better protect yourself.
Phone Scams
If you receive an aggressive phone call out of the blue from an IRS agent threatening police arrest, deportation, license revocation (etc.), unless you pay, it’s a scam. In some cases, the fake IRS agent will ask that you confirm your identity by providing them with your birthdate and social security number. Which is exactly the information they need to steal your identity.
If you receive phone calls like these, do not give any information to them even if the call appears to be originating from the IRS. Scammers are able to alter the number to make it appear as though they are calling from the IRS. This is an ongoing issue for tax payers, and the IRS states that contact with tax payers is made through the postal service. The IRS will also never ask for credit card numbers, wire transfers, or pre-paid debit cards over the phone.
If you receive a phone call claiming you owe money call the IRS at 1-800-829-1040, to determine if the IRS is really trying to contact you.
Phishing and Email Scams
Phishing occurs when a fake website poses as a legitimate site to lure in victims, prompting them to fill out a form for membership, services, or any number of promises. These victims provide their personal and financial information, arming the criminals with everything they need to steal your identity.
These scams generally originate from an unsolicited email that provide a link to the phishing website. Keep an eye out for fake emails or websites designed to steal personal information. The IRS will never ask you about a bill or refund, or request personal or financial information through email.
Be sure to forward any suspicious emails to the IRS at phishing@irs.gov, then delete the email.
Tax-related Identity Theft
Tax related identity theft occurs when someone uses your stolen Social Security number to file a fraudulent tax return claiming a refund. The IRS has listed a number of ways to prevent becoming a victim of Identity theft.
Don’t carry your SS card or any documents that include your SS number.
Never give a business your SSN unless it is required, and you are confident the business is legitimate.
Protect your financial information at home, and any documents you throw away should be shredded first
Check your credit report annually.
Arm your computers using firewalls and anti-virus/spam software.
Don’t give personal information out over the phone, through mail, or email unless you are sure you know who you are dealing with.
Preparer Fraud
The vast majority of tax preparers are honest and provide quality service. However, there are some dishonest tax preparers out there that set up shop each season with the intention of committing tax fraud. The IRS warns to be on the lookout for preparers that ask you to sign a blank return, make promises of an abnormally large return before ever seeing your financials, or charge a fee based on a percentage of your return.
Check to see if your preparer has an IRS Preparer Tax Identification Number, and make sure they sign your return with that number. Also, ask your tax preparer if they have a professional credential (enrolled agent, certified public accountant, attorney). Tax return preparers aren’t required to have a professional credential, so if you do go with one that does not, be sure you understand their qualifications before providing them with your personal and financial information. Make sure to go over your return before signing it and ask questions if something isn’t clear or doesn’t seem right.
Fake Charities
Groups posing as charitable organizations to attract donations is a common scam with a simple solution. When donating to charity, you should take a few extra minutes to verify that the organization you are donating to is legitimate and qualified by the IRS.
Exempt organizations can be found with a tool the IRS has on its website. Click here to search for eligible charities.
Scams are constantly changing and criminals are always adopting new methods to trick you into parting with your financial information. It is important to be cautious when sharing your personal information with anyone or anything, be it over the phone or on the internet. You should always feel confident that the individuals or business’ you share your information with are reputable, if you want to avoid becoming a victim of a scam.
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