Beware These 6 Income Tax Scams

Taxes strike fear in the hearts of millions. That anxiety makes some people lose their heads and do things like hand out personal information to strangers claiming to be from the Internal Revenue Service.

We’ve uncovered some of the most common tricks scammers use. Keep your eyes peeled so you can avoid these attempts to steal your money.

Scam No. 1: Phony calls from the IRS

In this scam, threatening IRS agents call and inform you to pay up, or risk being carted off to prison.

You might be too sophisticated to be taken in by such a scam — or maybe not. The smartest people can become ensnared in such schemes. Also, make sure any elderly relatives or other people who might be susceptible know that if they ever get a call from the IRS, it’s a scam.

If you’re concerned that you might owe money, call the IRS directly at 1-800-829-1040.

Scam No. 2: Phony emails from the IRS

Let’s be very clear. The IRS lives in the Stone Age. They do not email. Ever.

Or at least, they don’t email you. They won’t be sending an email saying you need to click a link and verify your identity to get a refund. Likewise, you won’t go to jail if you don’t click on a link and fill in personal information.

Such emails are all a ruse to get you to give up information to the bad guys who want to steal from you, as you’ll see in scam No. 3.

Scam No. 3: Fraudsters who steal your thunder — and identity

Fraudsters often use scam No. 2 to pull off scam No. 3.

They use your name, address, Social Security number and other personal data to fill out and file a fake tax return in your name. Then, they get a big refund. Meanwhile, the IRS rejects your actual return because the agency thinks you already filed.

The problem can be fixed, but it’s a giant headache. Your best bet is to guard your Social Security number closely and file a return as soon as you have all the necessary paperwork.

Scam No. 4: Scam artists who promise a monster tax refund

It’s probably unwise to have taxes done by someone advertising on a telephone pole. Such “experts” might say they are going to get you the biggest refund ever, but there’s a chance they will falsify information to do so.

And before that shady return gets you a refund, the preparer might skim some money off the top. Remember, if the IRS audits you, the false information is your problem: The IRS holds taxpayers legally responsible for the information provided on their returns.

Scam No. 5: Fair-weather tax preparers

This scam is a variation of scam No. 4. These people don’t necessarily claim to give you the biggest refund, but instead trumpet their ability to do your taxes on the cheap.

The problem? They’re really crooks.

These so-called tax preparers may take your money and run. Or, they may file a return for you while helping themselves to your Social Security number and other information that can be used later for devious deeds, such as identity theft and retail fraud.

Protect yourself by carefully vetting any tax preparer. Search for reviews online, ask for referrals and read our article on how to pick the best tax pro.

Scam No. 6: Charities that aren’t really charities

Fraudulent charities can be a problem throughout the year, but they come back to bite you at tax time. If you are audited for deducting donations to a charity that really isn’t a charity, the IRS might hit you with more taxes and a penalty.

Typically, fake charities make look-alike logos and websites that trick you into thinking you’re donating to established organizations. They also may spring up after a disaster and take advantage of the fact that you want to help. In reality, little to none of your money will make it to the stated cause.

In addition, if a charity says it needs your Social Security number to take your donation, hang up the phone. No charity needs that information, and it’s likely a ploy to steal your identity.

Do you know about additional tax scams? Share them in comments below or on our Facebook page.

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