May 18, 2013

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Watch Out for Scams and Save Your Dollars!

May 15, 2013 By

Criminals have become excessively creative in their methods to steal anything from anyone today. The internet offers fraudsters the perfect avenue to contact unsuspecting individuals using an array of devious strategies. You might have come across some emails purporting to have originated from the IRS-don’t bite the bait; the IRS does not initiate communication with the taxpayers via emails.

Because the IRS is well known for its numerous and even confusing correspondences, it is still not yet very clear to most taxpayers how to guard themselves from fraudsters. What most people do not know is that IRS never sends any correspondence via the internet. The IRS will only send notices or tax documents through U.S. mail.

Most of these scam emails that might land in your inbox may ask for personal information which, if disclosed, can only be comparable to opening your front door to a gang of burglars. This is a very simple method to get access to your bank information and credit card finances. Most of the emails sent for phishing purposes contain links, which if clicked, can install data-extracting viruses or some other malware into your computer with ease. This makes it possible for the hacker to trace your personal information by monitoring the keystrokes of your keyboard; simple, but very dangerous.

The IRS website is unique in numerous ways, and phony emails stand out. However, if you are in a hurry to open and read the emails, you might not even the difference between irs.gov and something like irs.com or even worse, girs.com. The senders of these emails could be anywhere in the world. Note, that these individuals go an extra mile to copy the IRS website, even though most of them do such a shoddy job, and a single glance is all you need to detect danger.

Another important factor to consider is the English used on the website. There is a clear distinction amongst various English languages, but U.S. English is distinctive. However, countries like Russia are hiring native English writers and English-trained professionals to write acceptable U.S. English that can lure even the most astute mail readers. Even though you need to watch out for improper English, it is no longer a red alert. There are some perfectly coded websites with amazing U.S. English content still linked to phishing scams.

If you receive such emails, do not be in a hurry to respond to them, scrutinize the details of the website and if there is anything fishy, report them to the IRS. A simple search on the IRS website with the keyword “phishing” will open up some links on how to report such cases.  Finally, before making any monetary transactions, it is important to research and verify the organization or company.

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Common Tax Scams You Must Watch Out for and Avoid

November 20, 2012 By

Some tax crooks come up with very tempting but blacklisted tax ideas and strategies that pose serious legal consequences like hefty fines and even imprisonment if detected by the IRS. There are numerous tax scams that taxpayers are warned against and must be avoided like plague.

Identity theft cases have been increasing recently; a situation that has prompted the IRS to launch a comprehensive strategy to fish out the culprits who file falsified returns and use fake refund schemes. Taxpayers are advised to timely report to the IRS Identity Protection Specialized Unit whenever they believe private information has been leaked and used without their knowledge or approval. Please visit the IRS website for more information on this.
Taxpayers are also warned by the IRS against sharing any personal or financial information through email with individuals pretending to work for the IRS. The IRS does not contact taxpayers requesting for any sensitive personal information through unsolicited emails. Such correspondences must be reported to phishing@irs.gov immediately. Another scam involves fake tax preparers who take advantage of the tax filing season to steal from taxpayers seeking tax preparation services. As much as there are many professional and legit tax preparers, there are a few who float their clients’ refunds or inflate their fees or even promise exaggerated refunds. You must therefore, choose your tax preparer carefully and only after serious scrutiny.

Taxes are everyone’s responsibility and tax evasion is a criminal offense. Some taxpayers choose to stash their loot in offshore bank accounts for personal reasons – normally to evade paying taxes. Those found guilty of this offense face serious penalties or even serve a term behind bars. Furthermore, there are some scams on Social Security, especially for the low income earners or senior members. Taxpayers have to be alert and watch out for such scams and report to the IRS immediately.

The IRS encourages taxpayers to claim tax refunds to lessen their tax obligations. These refunds must however, be genuinely earned with actual income earned and expenses incurred. Some taxpayers however, choose to inflate their income or expenses to earn more tax credits like the Earned Income Tax Credit. This could only result in high interests, penalties, or even a prison sentence.

Other common scams that the IRS is trying to stamp out include fake Form 1099 refund claims, outlandish tax scams and arguments, false claiming of zero wages, misuse of charitable organization tax breaks, misusing trusts, or faked corporate ownership. The IRS has tightened its rules and anyone caught practicing any of these scams will face the full wrath of Uncle Sam.

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Beware of Common Tax Scams

November 7, 2012 By

The IRS publishes an annual list of dirty tax scams and warns taxpayers against tax fraud. Some tax scams are self inflicted, while others appear to be unbelievable tax refund offers or masquerading third parties. The IRS has over the years, singled out some common and easy-to-detect tax scams like reporting false income to earn high refundable credits, inflating the fuel tax credit, or even falsely claiming undeserved deductions. However, crooks are coming up with fresher scams that are not easy to detect.

Identity theft is one of the leading tax frauds and taxpayers are warned against sharing any personal information with strangers. It is possible for fraudsters to file a tax return in a taxpayer’s name and use their Social Security numbers to claim refunds they are not entitled to. The IRS has improved its screening process to spot falsely filed tax returns and appeals to taxpayers to report any suspicion to the IRS Special Identity Theft page on their website. Many victims only learn of this after receiving a note from the IRS notifying them of an already-processed tax return they actually didn’t file.
Another common scam is phishing which involves the use of fake or unsolicited emails posing as having originated from the IRS. Taxpayers can be lured into sharing personal or financial details with the senders of such emails. Such cases should be reported to the IRS at phishing@irs.gov. Be informed that the IRS does not ask for personal or financial data via email, neither does it initiate communication with taxpayers using this medium. Any attachments or links in suspicious emails should never be opened or clicked on.
Tax preparer fraud is another common scam that many taxpayers risk falling victims of. More than 60% of taxpayers seek the assistance of tax preparers when filing taxes. Some tax scammers are taking advantage of this to either steal from taxpayers, inflate their fees, or direct taxpayers’ refunds to their own accounts. In this regard, every taxpayers in now required to produce a Preparer Tax Identification Number (“PTIN”) issued by the IRS. Watch out for tax preparers without one or those who fail to enter the PTIN on the return or are reluctant to sign these documents.
Other common tax scams according to the IRS involves hiding of income in offshore accounts, foreign banks issued credit cards, and many other approaches. The IRS is collaborating with other countries to discover these culprits. Finally, some entrepreneurs disguise real ownership of businesses or trusts. The IRS is treating all these scams with seriousness and anyone found culpable risks facing harsh penalties, interests, or even court prosecution.

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Avoiding Tax Scams is an Active Battle

August 17, 2012 By

 

During the tax-filing season, identity thieves and con artists surface, cashing in on the many taxpayers who either fear committing mistakes on their returns. Many people end up sharing their tax details, including bank account and Social Security numbers, to strangers who tend to appear too considerate and willing to help with their tax woes.

Divulging personal tax and financial related information to anyone is very risky and amounts to excessive trouble. Be reminded that the IRS or tax preparers are not required to ask for comprehensive personal and financial details like your PINS, credit card access information, or passwords to bank account details. Anyone who tries to extract such information is definitely after more than merely preparing the taxes for you.

Most of these crooks initiate contact with unsuspecting taxpayers by email or phone. The IRS doesn’t call or email taxpayers to poke around for information. If you receive an email from anyone claiming to be the IRS or claims to direct you to an IRS site, don’t waste your time replying to such an email. If the email comes with attachments, don’t open them, as they might contain malicious viruses or spyware with the potential to infect and harm your computer. Furthermore, desist from clicking on any links in a doubtful email.  For more information, search for “identity theft” on the IRS website.

Some con artists have fake “IRS” websites that they use as their core tools of trade by confusing taxpayers. Be informed that the IRS website has always been www.irs.gov, and has never been changed. Any site that claims to be IRS but ending in .com, .org, .net among others other than .gov is fake, and should be avoided. Don’t divulge any personal information to such sites but rather, report them to the IRS.

The best way to end IRS scammers is staying in touch with the taxman to avoid being swindled. In case you receive suspicious phone calls, emails, letters, or faxes from anyone claiming to work with the IRS but you doubt if the individual works for the IRS at all, call the IRS at (800) 829-1040 to find out whether there is any genuine reason why the taxman might want to contact you. Phony emails should be forwarded to phishing@irs.gov. Furthermore, there is sufficient information on the IRS website under “phishing” on how some scams should be reported and cases of victimization.

The IRS is always on the lookout for any tax scams and has various investigators tracking down these crooks. The best way to help and enable them stop these bandits is by reporting any suspicious cases you encounter. Don’t let crooks control (or ruin) your life and finances.

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How to Avoid Fake Refund Schemes Abusing the Popular Education Tax Credit

August 9, 2012 By

 

The IRS has noted with concern the increased cases of phony schemes that tempt senior citizens and other taxpayers into filing their tax returns with claims of fraudulent refunds. Such schemes usually target individuals with little or no stable income, most of whom don’t have a tax filing obligation, with promises of refunds.

The architects of the schemes claim and brag about their ability to acquire a tax refund or unreal stimulus payment as per the American Opportunity Tax Credit, even without the victim having enrolled in or paying for college. Seniors appear to be the most appealing targets for this fraud. It usually doesn’t matter when the victim was last in schools as they falsely lure them into believing that refunds are available irrespective of the decade or century they went to school, which is very erroneous.

Sometimes, people are told of available college credit that can compensate them for paying taxes on things like groceries. Unfortunately, victims pay a huge price for these schemes as they don’t come cheap as they are asked to pay large amounts of upfront fees to facilitate filing. By the time they realize they have been duped, these fraudsters are usually long gone without leaving a trace.

The main reason taxpayers need to watch out for and avoid such scams is that, it doesn’t matter to the IRS who your tax preparer is, as you are legally bound to present accurate tax returns to the IRS and it is your responsibility to pay not only the refunds received erroneously, but also any penalties and interest, or worse still face criminal prosecution.

Taxpayers are therefore warned to stay alert and watch out for signs of these fraudulent schemes. The following are some of the alarming indicators to watch out for;

  • Fabricated claims and promises of refunds or rebates that are based on wrong statements of entitlement to tax credit.
  • Internet soliciting of Social Security numbers after individuals have been directed to toll-free numbers
  • Unusual for-profit tax services selling refund and credit schemes to a local church’s membership.
  •  Use of homemade brochures and flyers claiming availability of refunds and credits with no eligibility proof
  • Promised free money or refunds for low income without any documentations

Most these bogus schemes have so far been spotted and stopped by the IRS. The core sources of these frauds are being invested and when netted, the perpetrators can be subject to criminal prosecution. It is the responsibility of every taxpayer to stay alert; it is for your own good. Always check the IRS website for any clarification or call phone support.

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Top Five 2012 Dirty Dozen Tax Scams

July 5, 2012 By

The IRS compiles and publishes Dirty Dozen listing every year that highlights a variety of major scams that taxpayers are likely to encounter in the year. Most of the frauds usually launch into full gear during the filing season and preparation of returns. Taxpayers are reminded to shield themselves from some of these schemes that range from tax returns fraudsters to identity theft.

Engaging in illegal tax scams can lead to serious interests and penalties, and even criminal prosecution. Scams are shut down and the criminals behind them, prosecuted by the IRS Criminal Investigation Division that works hand-in-hand with the Department of Justice. The IRS’s 2012 top 5 Dirty Dozen tax scams are discussed below.

1. Identity Theft: There has been an increase in identity theft cases, which are among the most complicated cases the taxman has to deal with. This has triggered the IRS to embark on a serious strategy whose core focus is to prevent, detect, and resolve any identity theft cases within the shortest time possible. Wrong or fake tax returns are now highly targeted as the internal reviews have also been stepped up to scrutinize these returns well.

Many taxpayers are falling victims of identity thieves who fake a legitimate taxpayer’s identity, as well as personal information to file tax returns and claim a refund fraudulently. An individual only realizes that he/she has been victimized after receiving a notice from the IRS alleging multiple filing of returns in their name or false allegation that the taxpayer was paid some wages by an unidentified employer. If you suspect that your identity has been stolen and used for tax intentions, please contact the IRS identity Protection Specialized Unit immediately.

2. Phishing: Taxpayer can receive unsolicited email or a link to a phony website posing as a legitimate site to tempt them into sharing personal and financial details. The private information in the hands of a swindler can easily be used to either commit identity or financial theft. Any suspicious emails should be sent to phishing@irs.gov. Please bear in mind that IRS doesn’t request personal or financial information from taxpayers, via virtual means, including text messages and social media.

3. Fake Tax Returns Preparers: Close to 60% taxpayers rely on tax pros to prepare and file their returns for them. As much as there are some genuine providers, there is a breed of scammers who prey on unsuspicious individuals who prey on refunds, promise huge unrealistic refunds to attract new clients and also charge exorbitant fees. To avoid being conned, ensure that the preparer has a Preparer Tax Identification Number (PTIN), which must be entered into the returns he or she prepares for you.

4. Tax Evasion: Many individuals evade taxes by hiding lots of money in foreign bank accounts. As much as you can maintain foreign accounts legally, ensure that the necessary paper work and reporting is appropriately done. Failure to report and meet disclosure requirement calls for dire penalties, fines and even criminal prosecution.

5. Free IRS Money Scams:  Don’t be swayed by advertisers claiming they can file your returns with little or no documentation at all. The likely targets are the low-income earners and the seniors who end up losing their hard-earned cash for very bad advice. There are scams revolving around Social Security as well with taxpayers being promised non-existent refunds.

This list is not comprehensive. The complete Dirty Dozen Tax Scams for 2012 is available in the IRS website.

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Identity Theft and the IRS

June 11, 2012 By

Identity theft is a crime that involves the illegal acquisition and use of a person’s personal information. It normally begins when someone loses their identity information, or if it is stolen. The identity thieves then fraudulently file a tax return and claim a return using the stolen identity. The identity thief may also use this information to acquire work. Unfortunately, the legitimate taxpayer may be in the dark concerning the fraudulent activity until they file their return unknowingly, and it is discovered that two returns have been filed using identical Social Security numbers. Therefore, it is important to stay vigilant in protecting one’s private information in order to avoid being the victim of an identity theft.

Here are some of the ways you can avoid being a victim of this vicious crime:

1. You should always be aware that the IRS NEVER initiates contact with taxpayers directly via email to request personal or financial information. Be wary of emails that state you are being electronically audited or are due to receive a refund.

2. Emails claiming to be from the IRS amount to a crime called phishing. If you receive a scam email, forward it to the IRS at phishing@irs.gov.

3. Identity thieves may obtain your personal information by a variety of means, including:

　　 * Robbery –stealing your wallet or purse
　　 * Posing as someone who is seeking information about you through a phone call or e-mail
　　 * Going through your trash for personal information
　　 * Information you provide to an unsecured Internet site may be accessed remotely.

4. Some illegal websites may claim to be belonging to the IRS, and are a key means by which identity theft is carried out. If you discover a website that claims to be the IRS but does not begin with ‘www.irs.gov,’ forward that link to the IRS at phishing@irs.gov.

5. It is possible to identify a secure and an insecure website. Insecure websites may be used to illegally acquire stolen identity information. To learn how to identify a secure website, visit the Federal Trade Commission at www.onguardonline.gov/tools/recognize-secure-site-using-ssl.aspx

6. Stolen identity information may be used by another person to get a job. The person’s employer may report the income earned by them to the IRS using your Social Security number. This may make it seem like you did not disclose all your income. When this occurs, report to the IRS that the income is not yours, and your records will be updated to include only information belonging to you. You will also be required to authenticate your identity to prevent any similar occurrence in the future.

7. To identify if your identity has been stolen, the letter from the IRS will indicate more than one tax return was filed, or if the letter states you received wages from an employer you do not know. If you receive any such letter, please respond immediately to the name, address, or phone number indicated in the IRS notice.

8. If you believe you may be at risk of identity theft due to a lost wallet, a doubtful credit report, or questionable credit card activity, you are required to provide the IRS with proof of your identity, submit a copy of your valid government-issued identification – such as a Social Security card, driver’s license, or passport – along with a copy of a police report and/or a completed IRS Form 14039, Identity Theft Affidavit, which should be faxed to the IRS at 978-684-4542. Also contact the IRS Identity Protection Specialized Unit, toll-free at 800-908-4490.　In addition, follow Federal Trade Council guidance for reporting identity theft at www.ftc.gov/idtheft.

9. Do not carry your card or documents displaying your Social Security number often, and ensure you show your Social Security card to your employer when you start a job, or to your bank for tax reporting purposes.

10. In case you need additional information regarding identity theft, such as how to report phishing, identity theft and related fraudulent activity visit the IRS Identity Theft and Your Tax Records page.

11. IRS impersonation spawns during tax seasons and may take various forms, ranging from physical mail to even tweets. If you receive any communication claiming to be from IRS but you suspect it may be fraudulent, contact the IRS to confirm its legitimacy. If it is, reply if needed, and contact the Treasury Inspector General for Tax Administration at 1-800-366-4484 if it is not. You may also fax the notice/ letter received to the TIGTA, FAX number 1-202-927-7018.

12. Use a strong password to protect the data file while preparing your tax return for electronic filing. Upon filing, remove the personal information from your hard drive and burn it onto a cd or flash drive, which should then be stored in a safe place. If working with a tax professional, enquire about the information protection measures taken.

13. You may also file an online complaint with the Internet Crime Complaint Center (IC3) at www.ic3.gov., which gives victims of cyber-crime a reporting mechanism that alerts the authorities of suspected violations. The system sends every complaint to all law enforcement or regulatory agencies with jurisdiction over the issues.

Identity theft is a crime according to the law. It may, however, be stopped at its inception if people take the necessary care and caution with regard to their identity information, to avoid inconveniences.

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Be Safe – Watch out for Tax Scams!

November 9, 2011 By


Although it’s far easier for criminals to exploit tax schemes around the April filing deadline, tax scams happen all round the year. But regardless of the time of year, the most infamous tax con remains to be the phishing scam.

Through this con, identity thieves send out emails claiming to be from the Internal Revenue Service (IRS) and request personal and tax information from the recipients.

This scam is carried out in a number of ways. One way is to call a person and make an attempt at intimidation by charging that one will get arrested if they do not give personal information, such as credit card information and that they need the information immediately. If one receives such a call, they should immediately hang up and let the Federal Trade Commission (FTC) know about that call. Remember, the IRS never calls taxpayers to threaten them.

A new phishing scheme has emerged this fall. It announces important information about one’s tax returns, and states that they are unable to process a person’s tax return. The message, which is full of spelling and grammatical errors, continues to say that the IRS records show that the person identified as the primary taxpayer or spouse on the tax return did not give all the required documents as shown on the tax form and that based on the information, the tax account for the individual had been locked.

To get any expected refunds, according to the deceptive messages, the email recipient has to respond with all his or her financial and tax information.

Law-abiding citizens should note that the IRS does not send taxpayers emails asking for personal information. Sometimes, though, these emails are quite persuasive, such as when the criminals cite real IRS forms and notices in the fake emails. For example, recent phishing scams have referred to Notice CP01H.

The IRS does have a real CP01H that it sends to filers when it is unable to process one’s income tax relief. This may be because the Service has locked the account following information, from the Social Security Administration, that the Social Security number (SSN) of the primary or secondary taxpayer on the return belongs to one who was deceased before the current tax year.

The main difference is that the real IRS will send one this notice the old-fashioned way, through the U.S. Postal Service. No one should, therefore, fall for any email communication that is allegedly from the IRS, regardless of how realistic it may sound.

Another concern is tax preparation scams. A good example is one that informs customers of a due refund of over $600 and that they have to repay the stimulus money they received the previous year. Of course, these are pure lies meant to defraud innocent citizens. If one falls for the scam and gives them the “refund,” they pocket it and go underground, never to resurface.

If one is waiting for a refund, he/she should take the initiative to personally look into his/her tax money’s status through the IRS’s “Where’s My Refund?” tracking tool. In the event that one receives any scam emails, it is advisable to ignore and forward the bogus emails to the IRS.

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