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Tips For Avoiding Tax Scams

by | Feb 1, 2024 | 2024, Tax planning, Taxes | 0 comments

Tax season is here, which means spring is just around the corner. It’s the time of year when we look forward to better weather and tax refunds, but beware: tax season is also scam season.

In recent years, the IRS has observed an increase in tax fraud, such as phishing and phone scams, but the following guidelines can help you from being a victim:

Spot phone scams

Phone scams are very prevalent in this day and age. A caller purports to be from the IRS and wants quick tax payment, usually via credit card or wire transfer. They may threaten to send authorities to the call recipient’s residence. Other potential threats include the suspension of a driver’s or business license.

Actual IRS personnel will never demand payment over the phone or threaten to call the police. A legitimate representative will be able to educate you of your rights as a taxpayer, including the ability to query your bill and obtain a clear explanation of what you owe.

Don’t pay fake taxes

Some fraudsters approach people and demand payment for “taxes” such as the “Federal Student Tax.” Never heard of it? That is because it does not exist.

The IRS suggests that you hang up on anybody you suspect is a fraudster and report the behavior to the IRS online or by calling 800-366-4484. Do not engage. The threats and reasoning of adept fraudsters can be compelling.

Verify all charities

Charitable gifts are tax deductible, but the donations must go to legitimate charity. Scammers will seek donations for bogus charity and claim that they are tax-deductible. If you are unsure about an organization, search it up online.

Phishing Scams

Con artists frequently utilize phishing to carry out tax frauds. During tax season, fraudsters claim to be IRS or other government officers. It uses e-mail to communicate with citizens. Their purpose is to get individuals to fill in the blanks on their tax forms by saying there is missing information. If the person trusts the fraudster, they will unknowingly provide personal information to the scammer.

Phishing emails try to deceive recipients into disclosing personal information or paying money. Here’s how it works: you receive an email from the IRS asking you to visit a link to supply certain information. It may want further information in order to get a refund, or it may require immediate payment for a tax obligation. Phishing emails might appear authentic and not raise concern at first glance.

As a general rule, any email requesting sensitive information should be considered suspect, regardless of whether it seems to be from the IRS, a financial institution, or a service provider such as your cable company.

Vishing Scams

Vishing (voice phishing) tax schemes are another way fraudsters target their victims. In this scenario, they will call a victim and pretend to be with the IRS. Then, to make their story more plausible, they warn the victim that there is an error in their paperwork, which might result in a fine or even jail time for the victim. Furthermore, the fraudster may claim to address the problem by obtaining people’s personal information by phone. It may even request that the client pay a charge to remedy the issue with a bank transfer or credit card.

Be wary of Scammers who Promise Generous Refunds

Another common tactic used by fraudsters is to appear as a tax filing professional. They masquerade as tax preparation experts and offer their services to victims in this situation. They will often yield a substantial tax return. Victims provide personal information and pay for services, but they never receive a refund.

Don’t wait!!!

The IRS does not always notify you when your return has been submitted, which might leave you in a pickle if you wait until the last minute to file your taxes and discover that someone else has already filed on your behalf. Scammers might attack your workplace in the same manner that they target your personal finances. If a criminal acquires access to your W-2 through your company, they can submit your tax returns as you, and you may be unaware of it for weeks or months. The longer you delay, the greater the opportunity for criminals to carry out this crime. Take control by filing your taxes as soon as possible.

 

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