Some of us dread tax season, because filling out forms and double-checking everything with a calculator can feel like a burden. But a few people love this time of year, because it’s their prime opportunity to steal Social Security numbers and even tax refunds. As you prepare to file your taxes, keep these five tax schemes in mind, and learn how to protect yourself against them.
Suspicious callers. If there is ever a problem with your tax return, or risk of an audit, the IRS will send you a letter in the mail. Anyone calling you on the phone, claiming to be with the IRS and demanding money or information, is almost certainly a con artist. Hang up the phone immediately, no matter what the caller ID says (they can set up fake phone numbers that look quite legitimate). You can always check with your tax professional or call the IRS yourself if you’re concerned about a problem with your return.
Phishing emails. Likewise, the IRS won’t notify you of a problem via email. If you receive an email from “The IRS” or even your tax preparation professional, don’t click any links included in the message. These often direct unsuspecting taxpayers to phony websites, where they are asked to “log in”. Now the scammer has gathered your username and password, and can log into your real account to gather information. If you want to log into a particular website, open a new tab on your browser and proceed from there.
Fake tax professionals. Always use a known and respected tax preparation service to file your return. Sometimes these temporary tax preparers who set up shop in the late winter and spring are simply con artists who will gather your information and then flee town (possibly with your refund in hand).
Suspicious charities. You’ve heard that you can receive a tax deduction for donations made to charities. However, these must be charities that are qualified by the IRS – not just any organization to which you give money. Unfortunately, some unscrupulous people establish phony charities each year, collect donations, and then disappear. Check with the IRS website to be sure that the name of your chosen charity exactly matches a name on their list of approved organizations.
Refund theft. Sometimes, taxpayers receive the disappointing (and confusing) news that their tax refund has already been paid… But they didn’t receive it. This often signals a tax refund scam, in which someone else uses your information to file a return and claim the refund due to you. If you suspect you’ve been a victim of this type of scheme, call the IRS Identity Protection Specialized Unit at 800-908-4490.
Always be careful with information such as your Social Security number, or your login credentials for tax preparation websites. When this information falls into the wrong hands, it can be difficult to catch the person and/or recover your money. Give us a call if you have any other financial planning questions, and we’ll be happy to help.
