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The Worst Tax Scams The IRS Knows About

It's the season for the IRS to start identifying scammers as they emerge from hiding to make life more difficult for both tax preparers and taxpayers alike. While it is true that tax scams can pop up almost anytime of the year, the time directly following tax filings is the most prevalent time for these scammers to appear. Check out some of the worst tax scams that have been sweeping the country.

 

Phony IRS agents

One of the most popular scams is the phone scam where the caller will pose as an IRS agent in an attempt to steal either your personal information or money. These calls are usually threatening in nature, claiming that you are at risk of arrest, license revocation, or deportation if you do not pay the tax bill that is due. These calls can be somewhat convincing for a couple of reasons. Most of the time, the caller will have some of your information typically your address and phone number, but sometimes even the last four digits of your social security number. 

Sometimes you may even see the United States Government or IRS come through on the caller ID. The caller will often demand a specific form of payment such as Visa gift cards, debit cards, or credit cards. They promise if you pay, they can cancel the warrant for your arrest or stop more severe action. Unfortunately, some of these tactics have been successful, and they have taken taxpayers for over $70 million in less than ten years. 

The good news is, avoiding the scam is easy if you know how the IRS works. The IRS will never threaten arrest or demand specified forms of payment. They will also initiate all collections for tax bills via mail, not a phone call. So if you have never received a tax bill or followup notices in the mail, the IRS will not be contacting you, 

Stolen identities

Your tax forms have all the information that an identity thief would need to successfully take over your name as well as your credit. While the IRS has noted that there has been a significant drop in identity theft throughout the years, there are still scams that can have serious consequences if you end up falling victim to it. Thieves can try to obtain your personal information, often by lifting returns and W2 forms from the mail.

Other identity scams involve thieves who already have your information, using this information to file a fraudulent return in an attempt to get a refund. 

To avoid falling prey to an identity theft scam, you should be cautious about giving out your private information or providing it on unsecured sites. Monitoring your credit can also help you check for irregularities that could be a sign your identity has been compromised. Finally, always make sure that you use a tax preparer that is available year-round and can produce a PTIN when requested. A small portion of tax preparers are actually scammers, using the information gained from your tax return to steal using your identity. 

Money for nothing

There are many people who anxiously await tax season so to get as big as a refund as possible. Scammers know this and prey on this excitement by promising inflated tax refunds. They will attract you in any way they can. They may hand out flyers, post ads, make presentations to local churches or community groups, or even set up a phony storefront. They will claim that they know the secrets to get a larger refund through the use of benefits, unknown tax credits, or rebates. 

There is no quick fix or magic formula to receive more money from the IRS. You will be given a refund for any overages you paid after your deductions have been accounted for. Never sign up or attend seminars unless they are put on by licensed tax preparers and always make sure that you have your taxes prepared by a preparer that has credentials. A good tax preparer will be able to identify the deductions that you qualify for, and that will provide you with the most money for your refund.

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Law Offices of Robert T. Leonard, APC

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Toll Free: 888-408-9486
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