5 Signs of a Tax Scam

Jan 25, 2016 | Retirement

The holidays are over, and now it’s everyone’s favorite time of year: Tax season! Okay, so maybe it isn’t your favorite time of year, but you can bet criminals enjoy it. Every year, con artists scam tax payers out of millions of dollars by launching phony tax schemes. Watch out for these six signs of a scam, and remember to report any odd activity to the IRS and local law enforcement immediately.

Fake calls from the IRS. No matter what anyone tells you on the phone, remember that the IRS will not ask for payments or your checking account information this way. Con artists might try to scare you into compliance by threatening law enforcement, telling you you’ve been audited, or even mentioning something as ridiculous as deportation. In reality, the IRS will not make threats this way. If there is ever a problem with your tax return, they will send you a letter in the mail. Don’t give out personal information over the phone!

Your Caller ID might even trick you. Unfortunately, you can’t even trust your Caller ID to tell you the truth. Criminals know that’s the first thing you will check, so they use programs that make their number appear to be an official government line. If you’re in doubt, hang up the phone and call the IRS at 1-800-829-1040. A real representative can tell you if there are any concerns about your tax return.

Suspicious charities. Sadly, many “charities” are just bogus scams. You might receive a letter or phone call from a very official-sounding charity, reminding you that donations are tax deductible. However, you can only deduct charitable donations to organizations approved by the IRS, so check with them first to make sure a charity is legitimate.

You’re told that you already filed a tax return. You file your tax return, only to receive a notice from the IRS stating that you already filed your taxes. What happened? Unfortunately, this means a criminal used your information to claim a refund in your name. They can’t do this unless they have gained access to your personal information in some way, so never give out your Social Security number to anyone other than your employer and your tax accountant.

If this has already happened to you in the past, you can request a special personal identification number (PIN) from the IRS so that you can safely file your taxes in the future.

Fake tax preparation schemes. Any time someone offers to prepare your taxes for you, you should automatically be on guard. Stick with your trusted accountant, or call us for a referral. Many tax preparation “businesses” are just con artists looking to steal your information.

15253 – 2016/1/12

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