Every year, far too many Americans fall prey to tax scams, which prompt financial devastation and considerable stress. The more you know, however, the better you can avoid these schemes. Below, we detail a few of the top scams highlighted in the annual IRS ‘Dirty Dozen’ list, along with options for protecting yourself and your loved ones:
Phishing involves fraudulent efforts to obtain personal information such as credit card information or Social Security Numbers. Often, unsuspecting individuals are led into phishing traps involving emails that look official. In reality, however, the IRS never initiates contact regarding bills or refunds via email. When in doubt, avoid clicking on any electronic correspondence supposedly from the IRS.
Think twice if you receive a terrifying call from somebody claiming to be an IRS agent. Often, the criminals responsible for these scams will threaten drastic action, such as arrest, license revocation, or even deportation. Remember, it is not the IRS policy to demand immediate payment via prepaid cards or wire transfers. Rather, the IRS sends bills through the mail.
Return Preparer Fraud
Be careful when selecting a return preparer; some have unfortunately been known to commit identity theft or refund fraud. Be wary of preparers who promise inflated refunds without even bothering to examine tax records. Don’t agree to sign blank returns. Confirm the preparer’s reliability by seeking his or her Preparer Tax Identification Number.
IRS scams are a huge source of stress for today’s taxpayers, but they don’t have to be.