Tax season is upon us, and with the number and types of tax scams continuing to increase, it is important to be knowledgeable of the more sophisticated tactics scammers are using. Many scams are carried out via mail, telephone, email and even social media.
Email phishing attempts have become more prevalent over the past few years. One of the more common attempts involves a DocuSign email coming from the “IRS” asking you to update bank or personal information with a link apparently allowing you to conveniently update this information. Oftentimes, scammers are after your Social Security Number so they can file a false return and claim a refund. If you suspect that you have been targeted by an email phishing attempt or have become a victim, the IRS asks that you report these emails to firstname.lastname@example.org.
Another tax scam becoming more and more common are “ghost” tax preparers. These scammers present themselves to the public as reputable tax preparers who will file your return for you. They will claim several exemptions and deductions on your return and will charge you a percentage of your refund. Once the IRS realizes your return was misleading, the IRS will ask you to pay back the refund. In most cases, when you attempt to go back to the “ghost” tax preparer for the amount you paid them, you will not be able to contact them. They will have essentially disappeared with the money they gained from filing a fraudulent return on your behalf.
A good way to prevent “ghost” tax preparers from duping you is to ensure they charge you based on the hours worked and actual work completed in preparing your return. You should be wary of anyone claiming your fee will be based upon the refund you receive. A second way to ensure you are working with a legitimate tax professional is to make sure they have a Preparer Tax Identification Number (PTIN) with the IRS. You can check the IRS website for your tax preparer’s credentials showing whether they are an enrolled agent, certified public accountant or tax attorney. As a final step, you should always review your tax return prior to signing it and sending it to the IRS.
One of the most popular scams continues to be someone impersonating the IRS via phone and asking you to pay an unpaid tax bill or asking for sensitive personal information. It is extremely rare for the IRS to ever call you for these types of requests. Instances in which you may receive a call or in-person visit from the IRS include payment for an overdue bill, a delinquent tax return, an unpaid employment tax payment, or to tour a business as part of an audit or criminal investigation. Again, this is extremely rare and highly unlikely. If you know or suspect that you have received a call from an IRS phone scam, report it to the IRS.
The major takeaway in this is to be skeptical of anyone claiming to be the IRS who is requesting information. Keep in mind that the IRS will almost always contact you via postal mail and be sure to do your research on the tax professional filing your tax returns. Keeping these two points in mind may save you money, time and give you peace of mind.