29 Mar Scams to look out for during tax season
Spring is often known for its melting of snow, rainstorms, sunshine and flowers; however, it is also referred to as tax season. This tax season, be knowledgeable about the common tax scams, warning signs that you may fall victim to and the steps on how to protect yourself, your identity and your finances.
COMMON TAX SCAMS
- Phishing involves using email or malicious websites to infect a person’s device or trick them into disclosing their information. Phishing emails may appear to come from real financial institutions, e-commerce sites, charitable organizations or even government agencies such as the IRS.
- Phone calls are a tactic where scammers make phone calls or leave voicemails of an urgent or threatening nature. In the case of tax scams, the calls may advise the victim of a refund that they’re owed or demand that the victim settles an outstanding payment for back taxes. Caller ID spoofing may be used – making it appear like the person is calling from the IRS.
- Refund Calculation Scam. “The IRS recalculated your refund. Congratulations, we found an error in the original calculation of your tax return and owe you additional money. Please verify your account information so we can make a deposit.”
- Stimulus Payment Scam. “Our records show that you have not claimed your COVID-19 stimulus payment. Please provide us with your information so we can send it to you.”
- Verification Scam. “We need to verify your W-2 and other personal information. Please take pictures of your driver’s license, documents and forms, and send them to us.
- Gift Card Scam. “You owe us back taxes and may be charged with a federal crime. You must pay a penalty to avoid being prosecuted. Purchase these gift cards and send them to us and we will wipe your record clean.”
- In a fake charity scam, scammers pose as a legitimate charity, often with a similar name as a real charity, to trick individuals into donating money to their own cause – filling their pockets.
- Fake Tax Preparers. Watch out for tax preparers that refuse to sign the returns they prepare. If they gain access to your information they may file fraudulent tax returns redirecting your refund or attempt to access your bank accounts.
- A person attempts to file a tax return, either online or by mail, but are informed by the IRS or their state that they have already received one.
- A person informed by the IRS that an account has been registered in their name at IRS.gove even though he or she never created one.
- A person receives a transcript from the IRS that they did not request.
HOW TO PROTECT YOURSELF
- Identity Theft Resources. If someone you know believes they have become a victim of Identity Theft, please visit IdentityTheft.gov to report it and create a recovery plan. For specific information and resources for tax=related identity theft, visit the Identity Theft Central web page on the IRS website.
- Email & Internet Security Best Practices. Never use public Wi-Fi to file taxes or conduct other business such as online banking. Only connect to trusted networks. Remember that irs.gov is the only genuine website for the internal revenue service. All internet and email communications between you and the IRS would be through this site. Never send sensitive information via email and if you receive an email from an unknown source or one that seems suspicious, do not reply. Finally, report tax-related phishing emails to firstname.lastname@example.org. Visit “Tax Scams – How to Report Them” on the IRS website for additional information.
- IRS Representatives – Know How They Operate. The first point of contact by the IRS is typically by postal mail. The IRS will not contact you via email, text messaging or your social network, nor does it advertise on websites. IRS representatives always carry two forms of official credentials and you can confirm their identity by calling a dedicated IRS telephone number for verification. The IRS does not accept payments by gift cards.
- Donating to Charities. Only donate to charitable organizations that you trust. Beware of charities that require you to give or send cash. It’s important to verify charitable organizations using the tax-exempt organization search webpage on the IRS website.
- Using Tax Preparers. Beware of tax preparers that only accept cash payments or offer to claim fake deductions to inflate your tax refund. Only use a preparer that can provide you with their Tax Preparer Identification. YOu can very your tax preparer through the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications on the IRS website.
For more information and resources regarding identity theft protection or the IRS, visit IRS.gov.