Scams have become so prevalent that you can practically follow a schedule of scams based on the time of year. This time of year, it is time to start watching for tax time frauds.
As you prepare your tax return, be aware of the scams practiced this time of year. Remain vigilant, and remember that if it sounds too good to be true, it probably is. Here are some of the scams to watch out for:
Emails from the IRS
It’s scary to think that you might be receiving communication from the IRS, threatening you with a tax audit, or some other action. Other communications purporting to be from the IRS might tell you that some vital information is missing, and holding up your tax refund — or that you are entitled to a “special” tax rebate.
Understand that the IRS won’t send you emails for such official communications. If you receive an email claiming to be from the IRS, asking you to click on a link, or reply with certain information (usually personal information like a bank account number or Social Security number), don’t bite. Instead, go to IRS.gov, and initiate contact that way. There is a number you can call, or an email address you can use to verify the communication, and verify your situation. The IRS does not contact taxpayers via email.
There are also scams involving fraudulent tax preparers. These tax preparers claim to be able to get you a huge refund. They do this by claiming that they can help you get big deductions or credits. The problem is that the unscrupulous fill out your tax return form with fraudulent information, misrepresenting your income, or claiming deductions and credits you aren’t eligible for.
The tax return goes to the government, and you pay a few hundred dollars to get this help and end up with a massive tax refund. The problem, though, is that when the IRS catches the fraudulent information on the tax return, you will be heavily penalized. You will have to pay what you actually owe, along with penalties and interest. Meanwhile, the “tax professional” is long gone with the fee you paid.
Remember that you are ultimately responsible for the information on your tax return — no matter who helps you with it. As a result, it is vital that you double check your return, and make sure the information is accurate. Don’t be swayed by promises of great wealth in a tax refund.
Vet your tax preparer carefully, looking for properly certified professionals and accountants, and working with people you know are reputable. Be especially careful of someone who approaches you and promises to deliver a huge tax refund.
Even though you see an increase in tax scams during the height of tax season, it’s important to be on the watch throughout the year. Tax phishing scams and other scams are practiced all year. Don’t let your guard down. Be very suspicious of anyone contacting you and asking for personal information.