We’ve previously given you tips on tax preparation but were concerned that they weren’t enough. Everything from lottery wins to long lost lovers attempting to get in touch can add up to big trouble if you are being targeted by a scammer, and tax time is no different.
Tax Preparation Warning
While most tax preparation professionals are good people who do honest work – especially when located in a brick and mortar
establishment – there are those who are looking to get your sensitive information to hurt you. This includes identity theft and even using your bank and credit card numbers to withdraw cash for themselves.
In a statement from the IRS, Commissioner John Koskinen said, “Filing a tax return can be one of the biggest financial transactions of the year, so taxpayers should choose their tax return preparers carefully.”
He went on to say, “Most tax professionals provide top-notch service, but we see bad actors every year that steal from their clients or compromise returns in ways that can severely harm taxpayers.”
Types of Tax Preparation Scams
There are several types of tax preparation scams out there, and the IRS even refers to a “Dirty Dozen.” However, we’ve gathered the most common below:
- Fake IRS Phone Call – Scammers actually alter their caller id number to make it seem like they are with the IRS. These scammers will tell you there is an urgent issue with the IRS and your taxes. They can go on to threaten to garner your wages, file a suit, and even have you arrested. Or on other occasions, they will tell you that there is a tax refund waiting for you. In the first instance, the one where you allegedly owe the IRS a sum, they will ask for payment, usually in the form of a credit card. When revealing you have a refund waiting, they will ask for other bank and credit sensitive information and may even tell you there is a “charge” to process the refund. THE IRS DOES NOT WORK LIKE THIS. If you do owe them a sum or they owe you a refund, they will ALWAYS SEND A LETTER FIRST.
- Fake IRS Email – This scam is similar to the above. Individuals and businesses will get an email that looks like it is from the IRS which may even have an official URL like irs.com. The email will go onto say that there is an urgent matter with the IRS and to click on a link. What actually happens is users will click on a link that is part of a phishing scam, or where a virus enters your computer and gets all your logins, passwords, and more. The IRS NEVER CONTACTS PEOPLE VIA EMAIL. Unless you know the agent at the IRS personally or professionally, don’t expect an email from the agency.
- Tax Preparer Scam – They may post signs along the road, in the newspaper, flyers, and more. They will offer you a great rate to do your taxes. Except they won’t. They will file a bogus return, use your information in identity theft, and they may even collect your refund. The best way to avoid this is to go to an established business that does tax preparation. You can also check to see if the preparer has an IRS Preparer Tax Identification Number (PTIN).
- Fake IRS Letter – This one may be difficult to spot given that the IRS does primarily communicate via mail. However, a fake letter may get your personal info wrong. It may say “Dear Sir or Madam” rather than use your name. If you receive a letter like this, call your local IRS office or take it to your tax preparation professional. They will be able to confirm its authenticity. Do not call the number on the letter or mail a response until you do.
Those most vulnerable to these types of scams include seniors and immigrants – legal or otherwise – who are thought to not know the system and are more willing to pay a sum to make a threatening call or letter go away.
For more details on the “Dirty Dozen” tax scams for 2015, watch this video:
How to Report a Tax Preparation Scam
If you suspect or know of a tax preparation scam, there are a few things you can do:
- Call 800-366-4484 and report it
- Visit the Department of the Treasury Website and go to the IRS Impersonation Scam Reporting section
- Email the details of the scam to Phishing@irs.gov
- Fill out tax form 14157 to register your complaint
- Fill out tax form 14157-A to report that your tax preparer filed or changed your return without your consent
Tax Preparation in Houston
And if you are in need of tax preparation services in Houston or the surrounding area, please contact me.