Tax season is upon us, which means tax preparation sites are popping up on every corner. It’s the time of the year you look forward to your tax refund, but beware, tax season is also a popular scam season.
About 63% of Americans plan to do their taxes online this year, according to McAfee’s 2021 Consumer Security Mindset Report (https://www.mcafee.com/en-us/consumer-support/consumer-security- mindset.html). Out of those filers, about 12% will be filing their taxes online for the first time.
The IRS has reported a rise in tax scams such as phishing and phone scams, but the following tips can help you avoid becoming a victim:
1. Try to file your tax return early during the tax filing season. You should prioritize getting them prepared and filed as soon as possible. Every year, the IRS identifies several cases of identity theft where scammers use stolen personal information, including Social Security numbers, to file a tax return early in the season so they can claim a refund.
The earlier you file, the less of a chance scammers have to file pretending to be you. If the IRS flags your tax return as a duplicate or you can’t e-file because the system says you already filed, you will likely have to complete and submit the IRS’s identity theft affidavit form. That could mean that your refund
will be delayed until the proper documentation has been verified and the duplication is cleared up by the IRS.
2. Learn how to spot a phone scam. With the pandemic causing most of us to conduct business over the phone and online, it is critical that we be especially vigilant when using this method of communication during the tax season. Phone-based scams are common.
A caller claiming to be with the IRS and demanding immediate tax payment with a credit card or wire transfer is just one example. They may threaten to send authorities to your home. Other possible threats include suspending a driver’s license or business license. Actual IRS representatives will never demand payment over the phone or threaten to send the authorities.
A real representative will be able to inform you of your rights as a taxpayer, which includes the right to question your bill and receive a clear explanation of what you owe.
3. Protecting your personal information is important. This type of scam occurs when a person steals your personal information. They use the data, including your Social Security number, to file a tax return in your name. Scammers then claim the tax refund. You might not learn about the scam until you try to file your tax return. For instance, you may be unable to file your tax return because someone has already filed a return using your Social Security number. '
Always try to file your taxes with a credible tax preparation site. Be sure to check with the IRS to make sure the tax site is legitimate before you give them your personal information. Sometimes scammers pose as tax preparers and offer to help you with your tax return. They don’t, however, sign the return or include a Preparer Tax Identification Number (PTIN).
The law requires paid tax preparers to both sign and include their PTIN. Known as a ghost tax preparer, this type of thief may promise you a large refund and charge more money to prepare the returns. They could steal your personal information during the process.
4. Try to avoid phishing scams. Phishing scams are on the rise and is another scam tactic commonly used by criminals. Scammers typically send emails that look like they are sent by the IRS. They often lure their targets with a false promise of a refund or the threat of an audit. They may also set up a phony website that looks like the real IRS.gov. These phony sites often have the IRS seal and other graphics to make them appear official. Their goal is to get their victim to reveal personal and financial information. They use the information they get to steal identities and commit fraud.
The IRS doesn’t contact people by email about their tax account. Nor does the agency use email, social media, texting or fax to initiate contact or ask for personal or financial information.
If you get an email like this, do not click on a link or open any attachments. Don’t let tax scams take the fun out of your summer. Be alert to phone and phishing email scams that use the IRS as a lure.
5. If you think you are the victim of tax fraud, report it as soon as possible. If you think you may be a victim of a fraud or scam, the IRS has all the steps to take on its official site, www.irs.gov.
There are additional agencies that should be notified as well. That includes your state tax authority. If scammers have your information and have filed a fraudulent federal tax return, they will also likely file a fraudulent state return. Cleaning up these tax disasters can easily take several months or years to resolve, not to mention hours and hours of calls and conversations with the IRS. It could be much longer this year.
Tax fraud is big business and you are not immune from the tireless efforts of scammers that try to make you a victim. The enormous amounts of valuable personal and financial information shared online during this time of year make it a haven for thieves. They are doing everything they can to take full advantage of the opportunity tax season brings them. So, during this time of increased potential of having your personal information stolen, it is just as important to take steps to use the internet safely.
Remember that your personal information is like money. Scammers will continue their tax-time fraud exploits throughout the year. By making informed choices when sharing your personal information, by filing your tax returns as early as possible, by verifying that you’re speaking to the IRS, and by taking the time to report them, you can halt these identity thieves in their tracks!
For more information email me at Charlestien.email@example.com or call me at 662-624-5776.
Until next week---Stay financially fit!