Tax Scams

Protecting personal information is paramount to warding off financial fraud and identity theft. Tax scammers are more sophisticated than ever, and attacks are increasing. Scammers pretend to be from an organization or government body that the victim already knows; convince the victim there is a problem or prize; pressure victims to act immediately; and tell victims to pay in a specific way. As such, it is imperative for taxpayers to be aware of potential tax scams that can help them identify fraudulent requests and equip them to safeguard personal information from criminals.

Ghost Preparer Scams

Instead of filing legitimate tax returns, ghost preparers promise big refunds or charge preparation fees based on a percentage of the refund calculated. The ghost preparers do not sign the tax returns- instead they instruct the taxpayer to sign and mail the returns to the IRS. What’s more, ghost preparers claim fake deductions to boost refunds, and then direct the refunds into their own bank accounts rather than those of the taxpayers. For e-filed returns, ghost preparers refuse to digitally sign as the paid preparer, since paid preparers must have a valid Preparer Tax Identification Number (PTIN), and must sign the returns they prepare. Taxpayers should ask questions if something seems amiss and should verify that both the routing and bank account numbers appearing on the completed return are correct.

Identify Theft and Unemployment Benefit Scams

Fake unemployment benefit websites have been created by fraudsters in an effort to obtain personal information from consumers. These fake websites appear in text messages and emails that contain a link. Consumers are lead to believe they are applying for unemployment benefits on these fake websites, all the while disclosing personally identifiable information that can be used by a criminal to commit identify theft. Victims may receive mail from a governmental agency with information about an unemployment claim or payment, although they did not recently file for unemployment benefits. Or, an employer may receive a request for information about an unemployment claim for someone who is still employed. Employers are the best line of defense for unemployment fraud. Specifically, employers should respond to state unemployment claim notices if the notices contain names of individuals who are not employees. Furthermore, employers should be vigilant of fraudulent unemployment benefits claims filed using their company EINs.

Charity Fraud Scams

The need for help is widespread-both in the local community and internationally. The more distracted victims are when faced with conflicts and crises, the easier it is for criminals to prey on them. These scammers create bogus charities and direct contributions to illegal fundraisers. Fake donation requests may be delivered in person, via email and text messages, by phone, and through the use of a donation bucket outside of a storefront. Donations to charitable causes made to a qualified tax-exempt organization that is recognized by the IRS can be used to claim a deduction. Doing your own research will enable you to find legitimate charities. This can be done by using the Tax-Exempt Organization Search (TEOS) tool available at IRS.gov.

IRS Impersonation Scams

In person, by phone, and via email, scammers pose as IRS agents in an effort to seek out money and personal information from unsuspecting victims. These fraudsters may woo victims with a story to get victims to act on their request for money or information. In addition, they may threaten victims or claim something bad may happen if payment is not made or personal information is not provided. The IRS will never make demands for money or information over the phone, and the IRS will never request payment via wire transfer, gift card, or cryptocurrency.