How to Avoid Common Tax Season Scams
Be suspicious of threats., Double-check website addresses., Question claims of huge refunds., Check fees on tax-preparation services., Pass on a refund anticipation loan., Check the status of charitable organizations., Hang up on callers requesting...
Step-by-Step Guide
-
Step 1: Be suspicious of threats.
The IRS doesn't initiate communication with taxpayers, and won't threaten you with jail or a lawsuit.
If you receive a call or email from someone who claims to be from the IRS, it is an attempt to scam you.For example, some of these scammers will threaten to suspend your driver's license.
Driver's licenses are issued by state, not federal governments, and cannot be suspended by federal authorities for any reason.
Con artists can be very aggressive.
They will claim they work for the IRS, and may provide you with fake names or government badge numbers.
They may even hack the caller ID so that it appears the call is from the IRS.
If you get a call from someone claiming they work for the IRS, get as much information as you can from them (keeping in mind it will probably be fake), and then hang up.
Call the Treasury Inspector General for Tax Administration at 1-800-366-4484 to report the attempt. -
Step 2: Double-check website addresses.
Scammers may send you an email that includes a link to a website that looks similar to a government or tax-related website (such as "irsgov.com"), but in fact is designed to steal your personal information.If you click on these links, it typically will take you to a website that looks very official.
The scammers may even copy the actual headings and design of the real IRS website to trick you into providing information.
The IRS will never send you an email with links like this, because the IRS does not communicate with taxpayers using email.
If you get an email like this, it is a scam.
Do not reply to it, download any attachments, or click on any links. , One common tax season scam involves telling you that your tax return has been reviewed and the IRS has determined that you are owed an additional refund, typically of an extremely large amount.This scam is a ploy to get your bank account information.
The scammer will claim that this large sum of money will be deposited into your bank account, but a bank account number is needed so they know where to deposit the funds.
In reality, there will never be a deposit to your bank account.
Rather, the scammer will withdraw all of your money using the information you've given them.
Remember that neither the IRS, nor any tax-preparation service, will ever ask for your bank account information in this way.
Furthermore, it simply isn't the case that the IRS reviews tax returns so immediately to determine whether you paid too much.
If it sounds like it's too good to be true, it probably is. , There aren't a lot of regulations regarding how much tax preparers can charge for their services.
While this isn't necessarily a scam, it can be – they may make off with your money (and personal information) and never bother to prepare or file your taxes.If you get a phone call, email, or letter in the mail offering tax preparation services, review the information very carefully and research the organization to make sure they're licensed and legitimate.
Avoid using tax preparation services that charge fees based on a percentage of your return.
You'll pay exorbitant fees and even if the company does file your taxes, they may be fraudulent.
In that situation, the preparer has a motive to encourage you to claim deductions to which you're not entitled. , While refund anticipation loans are not necessarily a scam, they prey on your impatience and desire to have your refund as quickly as possible.
The fees involved in one of these loans may mean that you're not getting all the money to which you are entitled.For example, some companies give you a prepaid debit card loaded with the amount of your refund.
However, because there is a fee for each withdrawal on the card, and a limit on the amount you can withdraw at any one time, you could end up paying as much as 10 percent of your refund to the company in the form of fees.
Keep in mind the IRS will direct deposit your refund into your bank account, typically within a month of the date your return is accepted.
If you have a little patience, you can make sure you get all your money back. , Around tax season, many people start thinking about making charitable contributions that they can deduct from their taxes.
This provides an opportunity for scammers to take money or personal information.Often the scammer will use a name for the organization that is similar to an established and well-known charity.
For example, you may receive an email from the "National Heart Association" or the "American Heart Organization." The scammer hopes you will believe the donation request has come from the American Heart Association, a nationally recognized charity.
You can look up a charitable organization on the IRS's website to find out if they are legitimate, and if donations to that organization are in fact tax deductible.
You also can call the IRS at 1-877-829-5500 to verify an organization's tax-exempt status., The IRS does not accept gift cards as payment for taxes, nor will it request that you use a prepaid debit card, wire transfer, or money order for payment.Scammers often demand that you make payment using these methods because they are untraceable ways for them to get money from you.
The common tactic here is to call or email and tell you that the payment you made was returned or was not accepted, and that because of this failure, you now must pay using one of these methods.
The scammer is relying on the fact that this would be understandable in other contexts.
For example, if you write a check that is returned, the merchant may request payment using a money order or other verifiable funds. -
Step 3: Question claims of huge refunds.
-
Step 4: Check fees on tax-preparation services.
-
Step 5: Pass on a refund anticipation loan.
-
Step 6: Check the status of charitable organizations.
-
Step 7: Hang up on callers requesting alternative methods of payment.
Detailed Guide
The IRS doesn't initiate communication with taxpayers, and won't threaten you with jail or a lawsuit.
If you receive a call or email from someone who claims to be from the IRS, it is an attempt to scam you.For example, some of these scammers will threaten to suspend your driver's license.
Driver's licenses are issued by state, not federal governments, and cannot be suspended by federal authorities for any reason.
Con artists can be very aggressive.
They will claim they work for the IRS, and may provide you with fake names or government badge numbers.
They may even hack the caller ID so that it appears the call is from the IRS.
If you get a call from someone claiming they work for the IRS, get as much information as you can from them (keeping in mind it will probably be fake), and then hang up.
Call the Treasury Inspector General for Tax Administration at 1-800-366-4484 to report the attempt.
Scammers may send you an email that includes a link to a website that looks similar to a government or tax-related website (such as "irsgov.com"), but in fact is designed to steal your personal information.If you click on these links, it typically will take you to a website that looks very official.
The scammers may even copy the actual headings and design of the real IRS website to trick you into providing information.
The IRS will never send you an email with links like this, because the IRS does not communicate with taxpayers using email.
If you get an email like this, it is a scam.
Do not reply to it, download any attachments, or click on any links. , One common tax season scam involves telling you that your tax return has been reviewed and the IRS has determined that you are owed an additional refund, typically of an extremely large amount.This scam is a ploy to get your bank account information.
The scammer will claim that this large sum of money will be deposited into your bank account, but a bank account number is needed so they know where to deposit the funds.
In reality, there will never be a deposit to your bank account.
Rather, the scammer will withdraw all of your money using the information you've given them.
Remember that neither the IRS, nor any tax-preparation service, will ever ask for your bank account information in this way.
Furthermore, it simply isn't the case that the IRS reviews tax returns so immediately to determine whether you paid too much.
If it sounds like it's too good to be true, it probably is. , There aren't a lot of regulations regarding how much tax preparers can charge for their services.
While this isn't necessarily a scam, it can be – they may make off with your money (and personal information) and never bother to prepare or file your taxes.If you get a phone call, email, or letter in the mail offering tax preparation services, review the information very carefully and research the organization to make sure they're licensed and legitimate.
Avoid using tax preparation services that charge fees based on a percentage of your return.
You'll pay exorbitant fees and even if the company does file your taxes, they may be fraudulent.
In that situation, the preparer has a motive to encourage you to claim deductions to which you're not entitled. , While refund anticipation loans are not necessarily a scam, they prey on your impatience and desire to have your refund as quickly as possible.
The fees involved in one of these loans may mean that you're not getting all the money to which you are entitled.For example, some companies give you a prepaid debit card loaded with the amount of your refund.
However, because there is a fee for each withdrawal on the card, and a limit on the amount you can withdraw at any one time, you could end up paying as much as 10 percent of your refund to the company in the form of fees.
Keep in mind the IRS will direct deposit your refund into your bank account, typically within a month of the date your return is accepted.
If you have a little patience, you can make sure you get all your money back. , Around tax season, many people start thinking about making charitable contributions that they can deduct from their taxes.
This provides an opportunity for scammers to take money or personal information.Often the scammer will use a name for the organization that is similar to an established and well-known charity.
For example, you may receive an email from the "National Heart Association" or the "American Heart Organization." The scammer hopes you will believe the donation request has come from the American Heart Association, a nationally recognized charity.
You can look up a charitable organization on the IRS's website to find out if they are legitimate, and if donations to that organization are in fact tax deductible.
You also can call the IRS at 1-877-829-5500 to verify an organization's tax-exempt status., The IRS does not accept gift cards as payment for taxes, nor will it request that you use a prepaid debit card, wire transfer, or money order for payment.Scammers often demand that you make payment using these methods because they are untraceable ways for them to get money from you.
The common tactic here is to call or email and tell you that the payment you made was returned or was not accepted, and that because of this failure, you now must pay using one of these methods.
The scammer is relying on the fact that this would be understandable in other contexts.
For example, if you write a check that is returned, the merchant may request payment using a money order or other verifiable funds.
About the Author
Judith Gibson
Professional writer focused on creating easy-to-follow creative arts tutorials.
Rate This Guide
How helpful was this guide? Click to rate: