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IRS warns of 'dirty dozen' tax scams, phishing on rise

Suspected IRS imposter talks to Local 10 News' Call Christina team

PHONE SCAMS

There has been a surge of calls from IRS imposters, in a practice known as phishing. These are scammers dialing for dollars, pretending to be from the IRS to steal your money. 

It is an issue the ‘Call Christina’ team has been hard at work warning you about over the past year. It is also a problem many Local 10 viewers have ‘Called Christina’ to report.

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CALLING A SUSPECTED IRS IMPOSTER

Just last week a viewer said someone left a voicemail claiming to be from the IRS.

When Investigative Reporter Christina Vazquez called the number back, a man identified himself as “William Black” from the “Internal Revenue Service”.

After Christina identified herself and told him she was recording the call she asked a question at which point the man said, “mm-hm, alright, nice listening to your sweet voice, bye,” and hung up.

Last week the New York-based number 646-368-8608 had been red-flagged by the White Pages with 11 spam reports in the last 90 days. By Thursday, it had been flagged as “extortion” labeled a “scam or fraud”.

 

A MAJOR THREAT: PHONE TAX SCAMS AND 'SPOOFING'

According to the Internal Revenue Service, scammers make unsolicited phone calls to taxpayers pretending to be IRS officials.  They harass them by threatening victims into paying through prepaid debit card or wire transfers, telling them failing to do so will result in an arrest, deportation or even the revoking of a license. 

With the increasing use of technology, scammers are able to alter caller ID numbers to make it look like a legitimate IRS phone call. It is a trick called “spoofing”. They even go to the extreme of using fake badge numbers of IRS agents. They tend to target those who are most vulnerable including, the elderly, newly arrived immigrants and those whose first language is not English.

They try to scare you by leaving “urgent” callback requests and demanding payment while they have you caught off guard. This scam remains at the top of the “Dirty Dozen” list with over 3,000 victims who collectively have paid over 14 million to con artists according to the Treasury Inspector General for Tax Administration.

These calls remain a major threat to taxpayers and as we enter the 2016 filing period, keep a few things in mind:


• The IRS will never call to demand an immediate payment without first mailing you a bill.
• The IRS will never require a specific payment method for your taxes
• The IRS will never threaten to bring in local police or any law-enforcement officials to arrest you for not paying.

If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

If you don't owe taxes or have no reason to think that you do:

• Do not give out any information. Hang up immediately.

• Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.

• Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.

If you know you owe, or think you may owe tax:

• Call the IRS at 800-829-1040. IRS workers can help you.

Stay alert to scams that use the IRS as a lure. Tax scams can happen any time of year, not just at tax time. For more, visit “Tax Scams and Consumer Alerts” on IRS.gov.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.


OTHER TAX SCAMS ON THE “DIRTY DOZEN” LIST:

The IRS provides taxpayers with a complete list of tips on how to spot a scammer:

Other tax scams listed on the “Dirty Dozen” include phishing schemes, emails or websites looking to steal a person’s personal information. These emails and websites can infect your computer with malware and give criminals access to sensitive information such as passwords, social security numbers and identity.

Another scam often associated with tax season is identity theft. Criminals file fraudulent returns using someone else’s Social Security number. “Keep your personal information safe and secure. Taxpayers should protect their computers and only give out their Social Security when absolutely necessary” says IRS Commissioner John Koskinen.

 

TAX PREPARERS


"Choose your tax return preparer carefully because you entrust them with your private financial information that needs to be protected," said IRS Commissioner John Koskinen. "Most preparers provide high-quality service but we run across cases each year where unscrupulous preparers steal from their clients and misfile their taxes."


Return preparers are a vital part of the U.S. tax system. About 60 percent of taxpayers use tax professionals to prepare their returns.


Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.


Choosing Return Preparers Carefully


It is important to choose carefully when hiring an individual or firm to prepare your return. Well-intentioned taxpayers can be misled by preparers who don’t understand taxes or who mislead people into taking credits or deductions they aren’t entitled to in order to increase their fee. Every year, these types of tax preparers face everything from penalties to even jail time for defrauding their clients.


Here are a few tips when choosing a tax preparer:


• Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN). Paid tax return preparers are required to register with the IRS, have a PTIN and include it on your tax return.


• Inquire whether the tax return preparer has a professional credential (enrolled agent, certified public accountant, or attorney), belongs to a professional organization or attends continuing education classes.

A number of tax law changes, including the Affordable Care Act provisions, can be complex. A competent tax professional needs to be up-to-date in these matters. Tax return preparers aren’t required to have a professional credential, but make sure you understand the qualifications of the preparer you select. IRS.gov has more information regarding the national tax professional organizations.


• Check the preparer’s qualifications.  Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help you find a tax return preparer with the qualifications that you prefer. The Directory is a searchable and sortable listing of certain preparers registered with the IRS. It includes the name, city, state and zip code of:


o Attorneys
o CPAs
o Enrolled Agents
o Enrolled Retirement Plan Agents
o Enrolled Actuaries
o Annual Filing Season Program participants


Check the preparer’s history.  Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory
Ask about service fees.  Avoid preparers who base fees on a percentage of their client’s refund. Also avoid those who boast bigger refunds than their competition. Make sure that your refund goes directly to you – not into your preparer’s bank account.
Ask to e-file your return.  Make sure your preparer offers IRS e-file. Paid preparers who do taxes for more than 10 clients generally must file electronically. The IRS has processed more than 1.5 billion e-filed tax returns. It’s the safest and most accurate way to file a return.
Provide records and receipts. Good preparers will ask to see your records and receipts. They’ll ask questions to determine your total income, deductions, tax credits and other items. Do not rely on a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
Make sure the preparer is available.  In the event questions come up about your tax return, you may need to contact your preparer after the return is filed. Avoid fly-by-night preparers.
Understand who can represent you. Attorneys, CPAs, and enrolled agents can represent any client before the IRS in any situation. Non-credentialed tax return preparers who participate in the IRS Annual Filing Season Program, can represent clients in limited situations. However, other tax return preparers cannot represent clients before the IRS on any returns prepared and filed after Dec. 31, 2015.
Never sign a blank return.  Don’t use a tax preparer that asks you to sign an incomplete or blank tax form.
Review your return before signing.  Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it.
Report abusive tax preparers to the IRS. You can report abusive tax return preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms on IRS.gov.


To find other tips about choosing a preparer, better understand the differences in credentials and qualifications, research the IRS preparer directory, and learn how to submit a complaint regarding a tax return preparer, visit www.irs.gov/chooseataxpro.


Reminder: Taxpayers are legally responsible for what is on their tax return even if it is prepared by someone else. Make sure the preparer you hire is up to the task.