As tax payers are scrambling to get their paperwork in order, tax scams are back in full swing. Keep a look out for these top three ways that scammers prey on unsuspecting taxpayers.
Stolen Social Security Numbers:
Looking forward to a tax return check this year? So are scammers! Scammers use stolen social security numbers and other personal information to file for tax returns for unsuspecting victims.
This scam is more prevalent than ever. Last year, the IRS saw an 80% increase from 2011 in the number of victims. And they are expecting the scam to be just as prevalent in 2013.Victims frequently don't even know that a return was filed for them until they receive an IRS notice in the mail about it.
Scammers love to prey on the public's anxiousness over paying taxes and their eagerness for a refund. Watch out for suspicious emails, text messages and phone calls claiming to be from the IRS.
Most frequently, scammers will tell consumers that they are entitled to a tax refund, but they must first reveal personal information to claim it. Sharing this information puts you at risk for identity theft, including scams like the one above.
Unfortunately, these phishing scams aren't just limited to tax season. They continue to crop up throughout the year. Just remember the IRS will only contact you through the mail.
Unscrupulous Tax Return Preparers:
Hiring someone to help with your taxes? Be very careful whom you choose. While often not an outright scam, unscrupulous tax preparation businesses do fool clients by skimming a portion of refunds, charging inflated fees for return prep services and/or promising refunds that are too good to be true. Courts have shut down some of the more notorious tax preparers, but new ones spring up to take their place. Just do your homework, and pick a reputable business.
Tips for Avoiding Tax Scams:
- If you receive unexpected mail from the IRS, follow up immediately. If you think you've been a victim of ID theft, complete the IRS form here.
- Choose a reputable tax preparer. Ask around and/or search on BBB.org to find a BBB accredited business.
- Do not fall for the promise of big refunds. Be wary of any tax preparation service that promises larger refunds than the competition. Also, avoid tax preparers who base their fee on a percentage of the refund.
- Be wary of emails, phone calls or text messages that claim to be from the IRS. If the IRS needs to contact you, it will generally do so through mail. Consumers who receive unsolicited email that appears to be from either the IRS or an organization with a similar name, such as the Electronic Federal Tax Payment System (EFTPS), should report it immediately to firstname.lastname@example.org.
- Do not provide any personal information, click on any links or open any attachments in suspicious emails or text messages.
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