Watch Out for These 5 Tax Scams
Tax season may be over for this year, but that doesn’t mean the scammers have given up. Be vigilant.
Sometimes, tax scams are so obvious that you can’t imagine anyone falling prey to them. Send gift cards or cryptocurrency in to settle your account with the IRS? Who would think that was legitimate?
Unfortunately, enough do that the scammers keep trying.
Still, some scammers are so good that you might be fooled. Here are five common scams to avoid.
Bogus charities. We’ve had our fair share of natural disasters over the last few years. Scammers love to use these in an attempt to work on your emotions and get you to help people and animals who’ve been affected. You can’t claim such a donation as a legitimate deduction on your tax return unless the caller represents a qualified tax-exempt organization recognized by the IRS.
Before you donate to a charitable organization, make sure the IRS recognizes it as legitimate.
Phishing (email) and Smishing (texts)
It’s a good rule of thumb to never give out sensitive personal information to anyone who initiates contact via email or texts, and especially social media. If you give it to an unscrupulous individual, you could find yourself a victim of identity theft. The IRS will not contact you through these channels.
Scams Through the U.S. Mail
The IRS send letters through the U.S. Mail, for a variety of reasons, including:
- You owe them money.
- Your refund should be smaller or larger.
- There is a question about your return.
- They need to verify your identity.
- Additional information is needed.
- They’ve changed your return.
- There will be a delay in processing your return.
Scammers have gotten quite good at replicating the look of IRS letters. The IRS includes a phone number that you can call to respond, but this, too, could be part of the scam. If you receive correspondence that looks suspicious, contact the IRS at (800) 829-1040.
Online Account “Help”
Third-party scammers may contact you and offer to help you set up an online account with the IRS. The IRS does not do this. It’s up to the taxpayer. This is not required, but if you do so, you can, for example, access your tax records and make and view payments.
Misleading Offer in Compromise Offers
Can’t pay your tax bill? An Offer in Compromise is an agreement between you and the IRS that settles a tax debt for less than the full amount owed. You can see if you’re eligible and pre-qualify for such a solution here.
You may be eligible to apply for an Offer in Compromise. If you come to an agreement with the IRS, you’ll be able to pay less than what you owe.
Offer in Compromise “mills” can scam taxpayers out of thousands of dollars by misrepresenting themselves and trying to mislead people who don’t meet the qualifications. If you’re going to consider this, you should initiate contact with the IRS.
Next Steps If You Get Approached By A Scammer
Like the IRS says, be wary of anyone approaching you with an IRS-related offer that sounds too good to be true. The agency encourages people to report individuals who suggest improper (and expensive) tax schemes. If you’re contacted by one of these scammers, complete a Form 14242 and fax it to:
Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135
Or you can report it to the IRS Whistleblower Office, which may offer a monetary reward.
Need Help With Past Tax Returns?
Maybe you filed for an extension for the 2022 tax year and you’re still struggling with your return. Or you’ve neglected to file for one or more previous years. Or perhaps you need to amend a return that you’ve already submitted. We’re available to assist you whatever your situation is.
If you already filed for last year and have received your refund, congratulations! But now’s the time to start planning for your 2023 tax return. Contact us if you want to schedule a session to discuss what you can be doing right now to make next April less painful and frustrating.