Fraudsters never slow down
Due to the never-ending stream of tax scams and tax-related identity fraud, the IRS recently issued its annual list of tax scams all individuals need to know. Below is an overview of the scams that occur both during and after tax season. The key is to always be on alert, keep your financial and personal information private and never let your guard down.
Phishing
Most phishing scams involve either unsolicited emails or fake websites that are built to look as if they are official. The idea is to lure you into providing your financial and personal information. Once the scam artists have access to your information, they are able to steal your money or your identity. Sometimes, criminals will ask you to download an attached “tax transcript.” Don’t do it! The attachment actually contains malware designed to infect your computer or phone.
The IRS will NEVER initiate contact with a taxpayer by email, text or social media to request financial or personal information. EVER. Also, you should never click on any links or download any unexpected e-mail attachments. If you receive one of these suspicious e-mails, forward it to phishing@irs.gov.
Listen to episode 124, “Don’t Open That Email,” on Rea’s award-winning podcast, unsuitable on Rea Radio, for tips to keep you safe from cybercriminals.
Phone Scams
With phone tax scams, fraudsters usually call individuals claiming the individuals owe money to the IRS or that they are due a large refund. Sometimes these calls look as though they are from the IRS on your Caller ID. Other times, callers claim to be law enforcement and threaten taxpayers with arrest, license revocation or deportation. A new twist officials are seeing this year is that criminals are requesting sensitive information while claiming to be from the Taxpayer Advocate Service (TAS). Don’t fall for these calls!
Since the IRS does not initially make phone calls, they certainly to do not call to announce money owed by or due to taxpayers. Furthermore, local law enforcement has nothing to do with the IRS and will not arrest, deport or revoke licenses due to tax payments.
While there is a TAS group, they do not contact taxpayers. Instead, taxpayers contact them for help.
The IRS does utilize private collection agencies to help collect unpaid taxes from several years ago. However, all initial contact will come from the IRS by way of a letter as well as a notification that a private collection agency is handling the matter.
Tax-Related Identity Theft
Tax-related identity theft occurs when a scammer uses your Social Security Number to claim a fraudulent tax refund. Oftentimes, taxpayers do not even realize they are a victim of this scam until they go to file their tax return and discover that one has already been filed with their Social Security number.
One way to help thwart this activity is to file your taxes early so that scammers don’t have the opportunity to file on your behalf. If you think you have been a victim of tax-related identity theft, the IRS recommends following these steps.
Tax Return Preparer Fraud
Yes, scam artists even pose as legitimate tax preparers and try to commit refund fraud or identity theft. Along with this scam, be wary of anyone promising an unreasonably large or inflated refund or tax credits. In this scenario, thieves will ask you to sign a blank return and promise a big refund without even looking at your tax records. You never see the return before it is filed. They also tend to charge excessive fees before victims get their refund.
Be sure to do your due diligence and work with a tax preparer you can trust. You can start with the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. It’s also important to look over your tax return before filing as you are legally responsible for what’s on your return, even if someone else prepares it.
Fake Charities
We see more and more groups posing as charitable organizations in order to solicit donations (they are not). This happens frequently after natural disasters but can pop up any time of the year.
Be wary of charities with names that are similar to nationally known organizations. It’s always good practice to check if the charity is legitimate before donating. Check out the IRS tax-exempt organization list to ensure the status of an organization.
With a little preparation and knowledge, you should be well armed to protect yourself against fraudsters. While this list is not all-encompassing, it does hit on the major scams currently occurring. If you run across anything that doesn’t seem on the up and up, give us a call. We are happy to help you identify fraud or help guide you through the process of recovery if you were a victim of a scam. We regularly notify our readers of new scams. Be sure to sign up to receive generation news, insights and updates from Rea & Associates to be added to our mailing list.
By Lisa Beamer, CPA (New Philadelphia office)