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Don’t Be a Victim of Tax Scams

  • 8 April 2014
  • Author: Cari Holbrook
  • Number of views: 3309
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Don’t Be a Victim of Tax Scams

Tax scams have already cost taxpayers more than $1 million this year. A recently reported phishing scam involves emails falsely labeled from the Taxpayer Advocate Service (TAS). The email usually begin with the following: “Your reported 2013 income is flagged for review due to a document processing error…” and leads to contact information for a bogus “advocate” assigned to your case. You can learn more at the TAS official site: www.irs.gov/advocate

Another tax scam perpetrated this year is a system of sophisticated phone calls that were widely reported late last month. The callers—claiming to be from the IRS—are convincing vulnerable taxpayers to use a prepaid debit card or wire service to pay fictional back taxes in order to avoid arrest, deportation or suspension of a business or driver’s license.

A third scam involves tax refund fraud: with the scammer filing taxes on your behalf, prompting the refund to be sent to a bogus address. Victims in these cases will receive a rejection on their tax return filings because—as far as the IRS is concerned—their tax return has already been filed.

These scammers often use official-looking IRS badges, caller ID numbers and letterhead. In many cases they can reference personal information, such as the last four digits of a victim’s Social Security number (as with the phone scam cases) or your entire Social Security number (as with the tax refund cases). So how can you spot a scammer when faced with one? Here are some clues and tips:

·         If you owe taxes, the IRS will send notice via U.S. Mail – not by email or by phone.

·         The IRS will never ask you to provide a credit card number over the phone. And it certainly will never insist you pay via debit or wire transfer.

·         If you receive a call from someone claiming to be from the IRS or any advocacy group, hang up and call the IRS yourself. If you believe you owe taxes, call: 1-800-829-1040. If you don’t currently owe taxes, call: 1-800-366-4484 to report the incident.

·         Do not open any unsolicited emails claiming to be from the IRS or TAS. Again, the IRS will always contact you via U.S. Mail. Instead, forward suspicious emails using  the instructions located at: www.irs.gov/uac/Report-Phishing

·         If you receive a rejection from the IRS on your tax filing, investigate it immediately. Sometimes it’s a matter of a simple error on your part, but it could also mean that someone else has filed a tax return utilizing your Social Security Number.   

·        Double check your tax refund check before depositing. One surprising scam involves sending out fake refund checks that look remarkably official. Deposit one of these checks, and confidential information like your bank account number may be exposed to the scammer.  

 

For more information about the types of tax scams that you may be facing, read the IRS article on the Dirty Dozen Tax Scams. The best way to preserve your wealth is to stay informed and to think twice before handing over your hard-earned income or sensitive financial information.

Image credit: c_brignell / 123RF Stock Photo

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