Stay Vigilant to Tax Scams Even Though Tax Season Has Ended
Tax season is officially behind us. Those who have filed their taxes without an extension can now officially breathe a sigh of relief.
Around this time each year, the IRS publishes a list of the 12 most active tax scams.
This year’s list which I found on The Motley Fool website, entitled The IRS Dirty Dozen List of Tax Scams for 2016 includes the usual attempts such as overinflated expenses, offshore tax avoidance, fake charities and the like. However, the top 4 spots go to some of the newer, most heinous and virulent scams which has cost taxpayers and the IRS literally billions of dollars in the last few years. I’ve included the top 4 to remind taxpayers that just because tax season is over, the scams do not end. Please educate yourself and share information with your friends and colleagues to help bring these crimes to an end and the criminals to justice.
In its basic form, this type of fraud involves the filing of a tax return using someone else’s personal identification without their knowledge of approval. One of the more sensitive types of data involving identity theft is the Social Security Number. It is in your best interest to keep this number as private as you can and to refrain from handing it over to anyone if possible, especially over the phone or by email. The IRS anticipates this as being the most noteworthy scam of 2016.
Phishing occurs when a malicious entity poses as a legitimate organization in an effort to extract personal, and often sensitive, data from you through a fake email. Keep in mind that the IRS does not send emails directly to taxpayers. So if you do receive an email claiming to be from the IRS, you should forward that email to firstname.lastname@example.org so that the authorities can be notified.
This is a classic scam and continues to thrive. The IRS states that they have noticed an uptick in these types of scams in recent years. Be very wary of those presenting themselves as tax authorities over the phone while requesting sensitive, personal information.
Return Preparer Fraud
The main culprits here are those who present themselves as tax professionals with a hidden agenda involving the preparation of fraudulent returns. These individuals or entities will often “set up shop” once a year during the tax filing season.