During Tax season, some unscrupulous scammers make life difficult for ordinary taxpayers. Watch out for these:
Phishing: These are emails that try to entice taxpayers into revealing personal or financial information. Younger clients can probably smell a phishing expedition a mile off. Older clients, however, might need to be careful. Remember that the IRS will never contact you by email about a bill or refund. Just because an email says it’s from the IRS doesn’t mean it really is! If you receive suspicious emails forward them to email@example.com. Remember: never open an attachment or link from an unknown or suspicious source.
Phone Scams: There has been a surge in callers claiming to be IRS agents. Sometimes they ask for information. Sometimes they demand payments for supposed tax bills. Know that you can just hang up, or you can refer the caller to their tax preparer.
Also you could ask for their address or phone number, and then report them to the IRS! Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident. You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" to the comments of your report.
Identity Theft: Fraudsters can use social security numbers to file fake tax returns. One way to protect yourself from identity theft is to use firewalls and anti-virus software. If you file your return and it’s already been filed, you are probably a victim of this type of theft. If you ever become victim to this, you can take some steps with the IRS: https://www.irs.gov/uac/taxpayer-guide-to-identity-theft One of these includes filling out an Affidavit of Identity Theft, Form 14039, and you may be given a special PIN by the IRS to use when filing your return in the future.
Fake Charities: Around tax time, fake charities come out like bugs in spring. They contact taxpayers and suggest deductible donations. They often use names that sound like real charities. Your Charity donation is only a deduction if it is contributed to an authenticated charity! The IRS.gov has tools to check the status of charitable organizations, but they recently made all organizations resubmit their Exempt Organizations paperwork, and it might not be completely up to date at the present time.
Fake Tax Preparers: Be on the lookout for fake tax preparers! There really are fly-by-night storefront preparers who exist only to make off with refunds or steal identities. You can always check with your prospective preparer and ask about their training and any designations they may have earned (i.e. CPA, EA). Be sure that they at least have a PTIN (Preparer Tax Identification Number) and identifying information as the preparer on your return in the signature area.
Inflated Refund Claims: Promises of big refunds are an age-old trick for luring taxpayers away from bona fide tax practitioners. Don’t fall for that, and be careful about signing blank returns or agreeing to a fee-based on a percentage of a refund.
Many times these preparers use unscrupulous methods to prepare such returns, often claiming dollar amounts not given to them by the taxpayer. If the IRS questions it, you may be left being unable to support items reported in the return, and this would result in a tax bill. In the end, you are responsible for your own return, so you might want to make sure you understand the amounts that are on it before you sign at the bottom.
I have partnered with Protection Plus to add an option to my services much like H&R Block’s Peace of Mind plan. For a fee, I can enroll you in this plan that would protect you in the event of an unlikely mistake by your preparer, or support you in the event of an Audit or Identity Theft. This plan is good for both Federal and State tax authorities. If you’re interested, I can purchase this plan for you at the time of filing your taxes, just be sure to let me know that you’d like to include it.
If you have any questions about this material or if you need help, please call me at 818-970-9491.