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Annual List of Tax Scams 2019

April 22, 2019
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The IRS issued its annual list of tax scams for 2019.  As tax filling season is winding down, we thought it would be relevant to list the various scams that taxpayers may encounter.

Here are some of the scams that are highlighted on the list:

Phishing -

Phishing scams usually involve unsolicited emails or fake websites that pose as legitimate IRS sites to convince you to provide personal or financial information. Once scam artists obtain this information, they use it to commit identity or financial theft.

This is the easiest scam to spot as the IRS will never initiate contact with you by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media.

Phone Scams -

Phone scams typically involve a phone call from someone claiming you owe money to the IRS or that you're entitled to a large refund. The calls may show up as coming from the IRS on your Caller ID, be accompanied by fake emails that appear to be from the IRS, or involve follow-up calls from individuals saying they are from law enforcement. Sometimes these callers may even threaten you with arrest, license revocation, or deportation.

The IRS (and its authorized private collection agencies) will NEVER:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments. The IRS will usually first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.
  • Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
  • Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
  • Ask for credit or debit card numbers over the phone.

Do you possibly owe money or are due for a large refund?  

Identity theft -

Tax-related identity theft occurs when someone uses your Social Security number to claim a fraudulent tax refund. You may not even realize you've been the victim of identity theft until you file your tax return and discover that a return has already been filed using your Social Security number. Or the IRS may send you a letter indicating it has identified a suspicious return using your Social Security number.

There are no easy solutions for this problem.  First, read up on my last blog post about best practices to prevent ID Theft.  Next, don't wait until the last day to file your taxes.  Be ready to file as early as possible to prevent anyone else's possible attempt.  In the meantime, If you are going to need to file late, consider reviewing & monitoring your tax account information on the IRS website using the link provided above.

Return Preparer Fraud -

Sometimes scam artists pose as legitimate tax preparers and try to take advantage of unsuspecting taxpayers by committing refund fraud or identity theft. It's important to choose a tax preparer carefully since you are legally responsible for what's on your return, even if it's prepared by someone else.

Use common sense for this.  Search various online resources to verify the professional background as your tax preparer (and their related firm).  Be sure to simply ask around.

Inflated Refund Claims -

Taxpayers should be wary of anyone promising an unreasonably large or inflated refund. These scam artists may ask you to sign a blank return and promise a big refund without looking at your tax records or charge fees based on a percentage of the refund.

As the common saying goes: "If it's too good to be true, it probably is..."

Fake Charities -

Groups sometimes pose as charitable organizations in order to solicit donations from unsuspecting donors. Be wary of charities with names that are similar to more familiar or nationally-known organizations. Before donating to a charity, make sure that it is legitimate. The IRS website has tools to assist you in checking out the status of a charitable organization.

You can search for charitable organizations here: https://www.irs.gov/charities-non-profits/tax-exempt-organization-search

Final Thoughts -

While tax scams are especially prevalent during tax season, they can take place at any time during the year. Remember to keep your personal and financial information private and be vigilant so you don't end up becoming the victim of a tax scam. For more information on tax scams visit irs.gov.

 

*** The information in this blog post is intended to be informational.  It is NOT intended as tax or legal advice.  It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.