Tax season is about more than just refunds or determining how much you will owe.
Scammers use this time as a prime opportunity to target taxpayers, and the Internal Revenue Service is providing a guide on what scams to look out for and how to avoid becoming a victim.
Some of the tips to avoid scams are as follows:
Understand how the IRS gets in touch
Don’t respond to phone messages, text messages, social media messages or email from those claiming to be the IRS or demanding payment.
The IRS doesn’t initiate contact with taxpayers through those means.
If the IRS does need to get in touch with you, it will do by sending out regular mail through the United States Postal Service.
It also doesn’t demand payment through debit cards or wire transfers but sends a bill through the mail.
If an IRS representative does need to pay a visit, that person will provide two forms of official credentials, a pocket commission and an HSPD-12 card.
Don’t use ‘ghost’ preparers
By law, anyone who is paid to prepare or assist in preparing federal tax returns must sign the return and include a Preparer Tax Identification Number.
Ghost preparers who promise bigger refunds don’t sign the return in print or online -- instead, telling the taxpayer to sign it and mail it to the IRS.
Ghost preparers might also require payment in cash without providing a receipt, direct refunds into their bank account instead of the taxpayer’s account or claim fake deductions to boost refunds.
Beware of direct deposit/wire transfer scams
Scammers often impersonate a company employee and ask for a human resource or payroll staff member to change their direct deposit for payroll purposes. The scammer provides a new bank account and routing number, which can result in the loss of payroll deposits.
Donating to real charities
The IRS has a search feature on its website to help taxpayers donate to legitimate charities, called Tax Exempt Organization Search.
Scammers like to impersonate charities in order to get money or private information, which will obviously affect tax returns.