As the tax deadline looms, tax scammers target potential victims
March 4, 2016
Thomas R. Throssell
Tax season is in full swing and the April 18 deadline to file the 2015 Tax Return is looming just on the horizon. And, if preparing taxes wasn’t stressful enough, the Internal Revenue Service is warning taxpayers of con artists who are looking to steal their hard-earned money through a variety of sophisticated scams.
The IRS has compiled a list of the most common scams called the “Dirty Dozen” to help tax payers avoid becoming a victim. Below are four of the “Dirty Dozen” tax scams that Community members are most likely to encounter.
Criminals, who are able to steal a person’s Social Security number, use that information to file fraudulent tax returns and collect those funds.
IRS spokesperson Bill Brunson, said, “Tax related identify theft is a different animal, in the sense,” that the criminal already has your name and SS number. They falsify a W-2 form with your information and file the tax electronically, and then the IRS may erroneously issue the refund to the criminal, he said.
The IRS reported mid-February of already seeing a 400 percent rise in phishing and malware incidents this tax season.
In response, the IRS wants taxpayers to be on guard against fake emails and websites designed to steal your personal information.
Return Preparer Fraud
Taxpayers should also be wary of unscrupulous tax return preparers.
While many tax professionals are honest and supply quality services, there are fraudulent tax refund preparers that commit identity theft and tax refund fraud.
The IRS impersonation telephone scam occurs when a victim receives an unsolicited phone call.
The caller claims to be an employee of the IRS and tells the victim they owe money that must be paid through a pre-loaded debit card or wire transfer, said Brunson.
Typically, the caller becomes hostile and angry, threatening the victim that if payment is not made they will be arrested, deported, or their driver’s license will be suspended.
Calls like these may be frightening, but the IRS wants you to know they will never call to demand immediate payment, demand payment without opportunity to question or appeal, require a specific payment method, ask for credit or debit card numbers on the phone, and most importantly, the IRS will never threaten arrest by local police.
“If you receive something along the lines of a demand for payment and have not had any dealings with the IRS and…it’s an unexpected call, you have a tax scam,” said Brunson. Hang up and if you are still unsure whether it was a scam or not, then call the IRS yourself, he said.
An effective way of guarding oneself against these types of tax scams is by reporting the scam to the proper authorities after it occurs and by talking about it with others.
“Let your relatives know that you have got this call and how it occurs, let your neighbors know so they don’t have the same problem,” said Brunson.
Other scams are Offshore Tax Avoidance, Inflated Refund Clams, Fake Charities, Falsely Padding Deductions, Excessive Claims, Falsifying Income, Abusive Tax Shelters and Frivolous Tax Arguments.
If you think that you have been a victim of a tax scam, contact the Treasury Inspector General for Tax Administration at 1-800-366-4484. You can also report tax scams to the Federal Trade Commission by visiting www.ftc.gov.
For more information about the different types of tax scams and how to avoid them, visit www.irs.gov/uac/Tax-Fraud-Alerts or call 1-800-829-1040.