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Posted by on Jan 20, 2016 in How To, In The News | 0 comments

How to Protect Yourself from a Tax Scam

tax scam BTB

Beware the tax man? It’s more like beware the man trying to impersonate him. It can be difficult to tell if you’re not up on the latest tax scam.

The government estimates close to 1 million people have received phone calls and emails from scammers this year, three times as many as last year. “They don’t care about anything other than trying to intimidate you into paying them money,” Tim Camus, deputy inspector general of the department, told CBS news. “They’re ruthless.”

Protecting yourself from tax scams is more important than ever. The Federal Trade Commission has declared Jan. 25-29 Tax Identity Theft Awareness Week. And, with the beginning of tax season on Jan. 19, the Treasury Department has issued an alert on common tax scams. The double push warns taxpayers that scammers posing as IRS agents and tax preparers are ramping up their efforts this year.

Pfishing Scams

It starts with a phone call, someone who says they’re from the IRS threatening you with jail time if you don’t send money ASAP. Or you might get an ominous-sounding robocall: “Don’t disregard this message… as delay in calling us back may end up in a legal matter.” Or you’ll get a threatening email.

If you get communication like this, hang up or delete. It’s a scam.

These scammers are pfishing for information, asking you for your Social Security number or a credit card number. They may also demand money upfront to get you to pay an uncollected “penalty” from last tax season. Often, they will use this information to file a tax return in your name and collect a refund.

If you use software to do your taxes yourself, you’ll find that major companies are well aware of the problem.  TurboTax warns on its website: “If you receive a phone call from someone who claims to be from the IRS, hang up. If you get an email claiming to be from the IRS, delete it. These are ploys to get your Social Security number and access your personal identity.” The company, and others, such as TaxACT, use secure servers in an effort to protect identity theft. If you’re not sure, call and ask.

To further protect yourself, remember that the IRS will never:

  • Call or email you unless you have established correspondence through the US mail
  • Demand your Social Security number
  • Threaten or harass you
  • Ask you for money over the phone.

Phony Tax Preparers

Another scam that is gaining ground involves unscrupulous or phony tax preparers. They may use letterhead from real or real-sounding companies offering to do your taxes for an unusually low fee. Beware of any unsolicited contact. Instead of clicking a link, Google the company itself and call. Make sure to check out whoever you choose to do your return. Know that those who prepare taxes – accountants, enrolled agents and tax attorneys – must be registered with the IRS.

H&R Block,  the nation’s largest tax preparation company, also says tax preparers must:

  • Have a preparer tax identification number (PTIN)
  • Pass competency tests
  • Take ongoing continuing professional education courses

Tax scammers are using our ingrained fear of the IRS to steal your identity, your money, or both. Even educated consumers – doctors, lawyers, teachers and the like – have been fooled into parting with their money. The scammers are that good. Don’t fall for it!

If you suspect you are being scammed, contact the IRS through phishing@irs.gov.

Click to get more information about  Tax Identity Theft Awareness Week.

Click to check the PTIN of your tax preparer. 

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