Beware: Top Identity Theft Scams and How to Protect Yourself

Tax season is a prime time for scammers to take advantage of unsuspecting victims. From phishing emails to fraudulent tax preparers, the tactics used by scammers are becoming more sophisticated by the year. These scams can result in stolen personal information, financial loss, and even legal trouble.

To help protect yourself during this crucial time, it’s essential to stay informed about the most common tax-related frauds. Read on to learn some of the most common scams that are currently circulating and how you might protect yourself and your loved ones.

  1. Phishing Scams
    Scammers send unsolicited emails or text messages that appear to be from the IRS, attempting to steal your personal information. These messages often claim there are issues with your tax return or offer unexpected refunds, prompting you to provide sensitive details.
  2. Phone Scams
    Fraudsters impersonate IRS agents, threatening immediate legal action or arrest unless payment is made right away. Payment is often demanded through gift cards or wire transfers, which are difficult to trace.
  3. Identity Theft
    Criminals use stolen personal information to file fraudulent tax returns and claim refunds in your name. Protecting your personal data is essential to prevent this type of scam.
  4. Fake Tax Preparers (“Ghost Preparers”)
    Some individuals pose as tax professionals without the proper credentials. They may charge fees for nonexistent services, fail to sign your tax return, or submit fraudulent returns.
  5. Unclaimed Refund Scams
    Scammers may send fake messages claiming you have unclaimed tax refunds, urging you to provide personal information in order to “claim” the refund.
  6. Employee Retention Credit (ERC) Scams
    Fraudsters target businesses by promoting false claims for the ERC, a pandemic-era tax credit, even if the business doesn’t qualify. They may charge high fees for assistance with the application process.
  7. Fake W-2 Scams
    Scammers may encourage taxpayers to falsify W-2 forms in order to inflate refunds. This can lead to severe penalties and legal consequences.
  8. Donation and Charity Scams
    During tax season, scammers impersonate legitimate charities to solicit donations. Always verify the legitimacy of a charity before making a contribution.
  9. Tax Preparer Fraud
    Dishonest tax preparers may falsify information on your tax returns to inflate refunds, charge excessive fees, or fail to sign the return altogether.
  10. Refund Calculation Scams
    Scammers may claim they’ve recalculated your refund and ask for personal information to “process” a new refund.
  11. Customer Service Scams
    Watch out for fake customer service reps who ask for money or personal info. Always

Additional Scams to be Aware of

  1. Wedding Photography Scams
    Watch out for fake wedding photographers who take your money and don’t deliver. Check their reviews, past work, and always get a contract.

Protective Measures:

  • Verify Communications: The IRS will not initiate contact via email, text, or social media. Always verify any unsolicited communication by contacting the IRS directly.
  • Protect Personal Information: Safeguard your personal and financial information. Be cautious when sharing details online or over the phone.
  • Choose Tax Preparers Carefully: Ensure your tax preparer has a valid Preparer Tax Identification Number (PTIN) and is reputable.
  • Report Scams: If you encounter a tax scam, report it to the IRS or the Social Security Administration Office to help protect others.
  • IRS Identity Theft Protection Tool: A security measure that provides taxpayers with a unique six-digit PIN to prevent fraudulent use of their Social Security number on federal tax returns.

For more information, visit:
irs.gov
ssa.gov
https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin

Additional Resources & Articles

Staying informed and vigilant is crucial in protecting yourself from these evolving tax scams.

This post is shared by Davis & Hodgdon CPAs as a service to our clients, business associates and friends.  Recipients should not act on the information presented without seeking prior professional advice.  For more information or to set up an appointment please reach out to us today.

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