Did you know that there are tax scams that happen all year long? Three very common scams include identity theft, phishing and return preparer fraud. These scams are illegal and can result in significant penalties. The schemes can range from assurances of large refunds to illegal ways of “untaxing” yourself. Investigators say criminals are learning new ways to steal your refund and your identity.
As you file your taxes, remember that you are ultimately reliable and legally responsible for the content of your return. Be wary of tax professionals who promise large refunds. You should never sign a tax return without thoroughly reviewing it to ensure its content is accurate and truthful.
Here are three common tax scams that every taxpayer should understand:
Identity theft. Tax fraud via identify theft is all too common. Your name, personal information and social security number are confiscated, then used by identify thieves without your permission. Identify thieves may commit fraud or another crime – or even file a fraudulent tax return and claim the refund as their own under another person’s identity. Be choosy before disclosing personal information – in today’s digital world, scams happen all too often. Even romance scams in online dating have led to some criminals stealing tax refunds. Remember, never give your name and other personal information to someone you don’t know.
Phishing. Phishing is a trick used to get unsuspecting victims to share personal or financial information with a scam artist. Phishing can happen when the scammer poses as the IRS or simply makes a phone call and falsely claims that they are someone they are not. Online privacy is fading fast – be sure to protect yourself. Don’t respond to bogus emails or make purchases from phony websites. These are also common situations where phishing occurs and the information obtained can be used to steal the victim’s identity and access bank accounts, make charges on credit cards and even apply for loans.
Return preparer fraud. The majority of tax preparers file correct and honest returns for their clients. Unfortunately, some skip a portion of the client’s refund or charge extravagant fees for tax preparation resulting in preparer fraud. Other tax professionals make false promises of large, but inaccurate, refunds. Avoid an audit, and keep in mind the saying “if it sounds too good to be true, it probably is.”
When you hire an professional or business to prepare your tax return, take your time and choose with care – after all, you don’t want to give every detail of your personal life to just anyone. Keep in mind that tax preparers who are compensated must always sign the prepared return and enter an IRS Preparer Tax Identification Number. Take advantage of the IRS webpage created to help taxpayers select a tax professional with added comfort. Visit www.irs.gov/chooseataxpro for assistance and info.
Each tax season, be extra cautious and keep your information as private as possible!
© 2014 Wymoo International
© Copyright 2014 Wymoo International. All Rights Reserved. This content is the property of Wymoo International, LLC and is protected by United States and international copyright laws.