As if tax time was not difficult enough with having to file on time, pay your tax liability and ensuring all your exemptions, deductions and credits are claimed; now you need to be aware of tax scams that can further plunge you into hot water with the IRS. Take time to understand the 5 biggest tax scams to avoid and ensure your tax liability does not grow.
Email phishing is a widely used scam by organized crime and petty criminals to attempt to lure you into a fake IRS website and gain access to your personal information, social security number and even get you to pay your taxes with a credit card. These scams are usually official-looking emails from the IRS stating that there was an error in your last assessment, or that you have been assessed a penalty. The worst or most obvious scams claim that you have been awarded a positive return because of an accounting error. The email gets you to click a link to a mirrored site that looks exactly like the IRS official website but is often missing important parts of the official URL. To avoid these types of scams, you should never respond to emails and go directly to the IRS website by typing it in your web browser, finding the appropriate contact information, and contacting them directly.
These ‘fake’ agents often make direct phone calls to you, notifying you of an unpaid tax liability. They usually alter their phone IDs to look like they are from official IRS lines and will even give you a fake IRS badge number. They are very aggressive in trying to collect on the debt and insist on instant payment by credit or debit card or by wire transfer. Avoid this type of scam by never giving out your credit or debit card information over the phone, and tell the agent you will make the payment online instead. The IRS specifically states it will never request this payment information over the phone. The scammers may offer a refund as stated above, but again this is simply to gain access to your personal information. The IRS will never collect sensitive data over the phone, demand a specific payment method, or call without mailing a letter first. If you
are being threatened with arrest, deportation, or other such punishments, you
are probably speaking with a scammer.
If a tax preparer promises exorbitantly large refunds, your first response should be disbelief and skepticism. Then you should contact a different tax preparer to evaluate your situation and ask them to give a range for your refund. You could even suggest the amount the first preparer promised and see their reaction. Make sure your tax preparer provides their IRS Preparer Tax Identification number on your tax return and asks for your proof of deductions, income, and credits. They must also sign your return as your preparer.
Identity thieves are constantly searching for ways to gain access to your personal information. This includes accessing your garbage for documents you’ve thrown away, trying to intercept your mail at your home, listening over your shoulder for your personal details, or even stealing your purse or wallet. If you know your personal data was compromised, immediately contact the right government departments to warn of the breach.
Pull Your Heart Strings
There are many attempts by individuals to scam you during tax season or after tragic events by getting you to donate to a charity claiming to be federally registered so you can get the tax credit. The only sure way to avoid this type of scam is to use the IRS website tool to check Exempt Organizations every time you receive a call for a charity donation.
You are always at risk for a tax scam, but learning to identify the red flags and being careful with your personal information can often save you.