5 Types of Tax Scams to Guard Against

Financial Tips

5 Types of Tax Scams to Guard Against

Posted by COTO Insurance & Financial Services
1 month ago | February 18, 2019

Tax season is an especially busy time for accountants, but unfortunately, it’s also a prime time for con artists. Tax refunds are some of their favorite “meat”, and they’re out hunting! As you get ready to file your federal income tax return, be on guard against these five common tax scams.

Phishing. If you receive an email from the IRS or your tax preparer, don’t click any links. The IRS won’t contact you by email. Your tax preparer might, but you should still open a new tab in your browser and proceed directly their known website before entering any login credentials. Many times the links in these emails are fake, and trick unsuspecting victims into sharing personal information like login passwords.

Suspicious phone calls. The IRS also won’t contact you via phone (they only send letters in the mail). If you receive an urgent call “warning” you that you owe back taxes or might be fined, this is likely a scam. No matter what the caller says, don’t give them any information. Hang up the phone and call the IRS directly if you feel concerned.

Phony tax preparers. Make sure you use a legitimate, well known tax preparation service, or ask your financial advisor for a recommendation. At this time of year, there are a lot of phony tax preparers out there, hoping you will trust them with your personal information.

Fake charities. It is true that you can earn a tax deduction for donations to a charity, but it must be a charitable organization approved by the IRS. Be aware that many fake charities exist, and they often use names that sound very similar to the real ones. If you’re solicited for a donation, you can check on the group’s legitimacy at the IRS website.

Stolen refunds. These scams are particularly nasty, because you might discover too late that someone else has already filed a return in your name and claimed the refund due to you. This is why safeguarding your Social Security number is so important. If you suspect you’ve been a victim of this type of scam, call the IRS Identity Protection Specialized Unit at 800-908-4490.

Be careful this tax season, and remember to check credentials of any person or website before giving out personal information. If you have other questions about financial planning, please give us a call.

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