BEWARE OF TAX SEASON SCAMS
Some people think the Internal Revenue Service (IRS) is a taxpayer’s worst enemy. But there are far worse adversaries to keep an eye on this season. Those adversaries may call on the phone, appear on the Internet or invite you into a very professional-looking shop. Sometimes the worst adversary is your very own self.
We all want to keep more of what we earn, but trying to get any more than that may cost you dearly in the long run.
It’s estimated that over 60% of taxpayers rely on a professional to prepare their tax returns. But it’s the taxpayer who has the ultimate responsibility for his or her own personal tax returns. Here are a few suggestions to keep you clear of obstacles and pitfalls on this potentially treacherous road whether you have a guide or are going it alone.
1. Phone Scams: If you receive a phone call from someone claiming to be from the IRS, hang up. The IRS communicates in writing. If you get a letter from the IRS giving you a phone number to call that might be legitimate. But if you get a “cold” call from someone saying they’re from the IRS, hang up or ask to be contacted in writing.
2. Phishing/Fake emails. Beware of emails supposedly from the IRS that invite you to “click” through to a link or an attachment. The attachment typically asks for your personal information or it may open up your computer to thieves. It’s a practice called “phishing”. Don’t get hooked. If you get such an email delete it: don’t click on it. The IRS won’t reach out to you in this way. You could be prey to a predator looking for your personal information.
3. Identity theft. A lot of thieves get rich by filing fraudulent claims this season. It’s getting harder to keep hold of your social security number but be especially vigilant about giving out any personal information on applications etc.
4. Fake hope in charities. Groups pretending to have non-profit status can lure you into donating to what may sound like a great cause. They’ll even promise you tax deductions for your gifts. Some of these phony organizations may have names that sound like well known causes. Don’t fall for this. Go to the IRS website and get the tools you need to check the status of charitable organizations.
5. If it sounds too good to be true, it probably is. If anyone asks you to sign a blank return in exchange for a promise of a big refund don’t do it. Likewise, if a tax preparer wants to charge you a percentage of your return, steer clear. Scam artists are adept at luring unsuspecting clients with big promises. Don’t fall for it.
6. Credits where they’re not due. Shady tax preparers typically try to claim things like Fuel Tax Credits to inflate refunds. Such credits are typically limited to off-highway use…like farming for example. Apply the brakes before you allow anything like this.
7. Falsifying documents. Don’t even think of filing things like a fake form 1099, for example, even if your preparer suggests it. This is sure to trigger scrutiny from the IRS and no one wants or needs that kind of attention.
If you encounter any of the aforementioned scams, do yourself a favor and call a professional CPA you know and trust and ask questions so you don’t get scammed out of your money or put yourself in harms way.