It’s that time of year again, folks! No, not pumpkin spice latte season (unfortunately), it’s TAX SEASON!
But before you start gathering all your paperwork and crunching numbers, there’s something important you need to know: it’s also prime time for scammers.
Don’t worry, this blog post will go over some common tax season scams and most importantly, tips on how to avoid falling victim to them.
Most common tax season scams to watch out for
As tax season approaches, it’s important to be aware of the various scams that bad actors may use to take advantage of unsuspecting individuals and businesses.
Criminals will send fake emails or texts pretending to be from the IRS or other tax-related organizations. They’ll ask for personal information like your Social Security number or bank account number. Don’t fall for it!
But here’s the thing: the IRS will never initiate contact with you via email or text. If you’re unsure if an email is legitimate, go to the IRS website and look for their official contact information.
Phone scams or the impersonation of tax agents
Here, scammers will call you, claiming to be from the IRS and telling you that you owe back taxes. They’ll threaten to arrest you if you don’t pay up right away. Again, the IRS never initiates contact with taxpayers via email or phone for the purpose of collecting tax debts.
So, if you ever receive a call from someone claiming to be from the IRS, just hang up and contact the IRS directly by visiting the official website or call the toll-free number 1-800-829-1040.
And remember, never give out personal information over the phone unless you have initiated the call and are certain of the identity of the person on the other end.
Ah, the fake charities. This is a bad actor’s favorite trick. These scams aren’t new: they’ve been around for decades, and they use the same basic playbook.
Here’s how the game works: A scammer will send an email with a subject line like “Tax season donation request” or “You’ve won $1 million!” The body of the email explains that your contribution will be used for someone in need, such as providing medical care for kids who can’t afford health insurance.
It ends with an urgent message like, “We have only three days left!” or “Time is running out!” If you’re moved by this story, you may be tempted to donate before checking out whether it’s true—but if this happens, your money could end up funding anything other than cancer treatment or helping families in poverty.
To avoid getting caught by these fake charities, watch out for these red flags:
- Charities using names similar to well-known non-profits (for example: “CancerCare” vs “The American Cancer Society)
- Emails coming from unfamiliar addresses
Tax preparer fraud
With all these scams around, you’d think you’d be safe trusting a professional. But be careful who you trust with your tax returns. Some scam artists will go through all the trouble of setting up fake tax preparation businesses and stealing your refund.
To avoid falling for this scam, be wary of tax preparers who guarantee a refund before even looking at your tax documents and avoid preparers who base their fee on a percentage of your refund.
Instead, use a reputable tax preparation service and make sure they have a Preparer Tax Identification Number (PTIN) or prepare your own taxes using software.
Scammers may file a false tax return using your stolen personal information and pocket the refund.
To avoid identity theft, always use strong passwords and never disclose personal information over the phone, email, or social media.
How to protect yourself from tax season scams
Now that you know what to watch out for, let’s do a roundup of tips to keep yourself and your finances safe during tax season:
- Don’t give out personal information over the phone or online unless you initiated the contact and you know it’s legitimate.
- Use strong, unique passwords for all your online accounts, including your email and any tax-related accounts.
- Use security software, like antivirus and a firewall, to protect your computer from malware.
- Use a secure internet connection when filing your taxes.
- Keep your personal information in a secure place, like a locked file cabinet or a safe.
- File your taxes as early as possible (before the criminal has a chance to file using your information) and keep track of your Social Security statement to make sure no one is using your number.
- Monitor your credit report.
By following these tips and being aware of the common scams, you can make sure that your tax season is as stress-free as possible and that your hard-earned money stays where it belongs: in your pocket.
Scammers are hard at work all year long and will stop at nothing to try to outsmart you during tax season.
Scammers are constantly looking for new ways to get information that can be used for identity theft or other fraudulent activities, and tax season is one of their favorite times of the year.
They will use any tactic that might get you to give up your sensitive information—so keep an eye out for emails from people claiming to work at the IRS or similar organizations (such as the Canada Revenue Agency). These could be real emails from fake groups trying to scam people into giving them sensitive information like bank account numbers and passwords through phishing scams (when someone sends you an email pretending it’s from someone else).
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