The Investor’s Watchdog

The Investor's Watchdog

Watch out for these Common Tax Scams

Monday, March 4, 2019

Tax season is here. Unfortunately, it’s a time of year when many people lose money due to tax scams as schemers become more and more sophisticated. Protect your money and your personal information by learning about some of the most common tax scams and how you can avoid them.

Phone scams

It’s common for criminals to impersonate the IRS, most commonly over the phone. Scammers may call claiming that there is a problem with your refund or that you owe more money.
How to avoid: You can avoid falling victim to this type of scam by knowing this . . . the IRS will never contact you by phone to request money, only by mail. If someone calls you claiming they are from the IRS, they are attempting to scam you. Call the IRS immediately to report the scam and ensure there is no issue with your taxes.

Inflated refunds

Some preparers may promise abnormally large refunds, oftentimes signaling misconduct. According to the IRS, you should be on the lookout for those asking you to sign a blank return, anyone who promises you a big refund before looking at your information and preparers who collect their fee based on a percentage of your refund.
How to avoid: Know that if you file incorrect information as part of your tax return, you are responsible. Do the appropriate research when choosing a tax professional to work with and ensure your return is accurate before signing and filing.

Identity theft

If crooks have access to your personal information, they can easily claim to be you and file a false return on your behalf, collecting your refund.
How to avoid: Continuously educate yourself on social security number safety. Be careful who and when you share personal information, especially your social security number.

Fake emails

Phishing, or cybercrime in which victims are contacted by someone disguising themselves as a reputable organization in order to obtain personal information, is a common tactic used by tax scammers. Someone may contact you via email claiming to be the IRS or promising an instant refund in exchange for your personal information. The email may even point to a fake website that looks legitimate.
How to avoid: Just as the IRS won’t contact you via phone, they won’t contact you via email either. If you receive an email from someone claiming to be the IRS, do not reply, click any links or open any attachments. Simply forward it to phishing@irs.gov and then delete it.

Don’t fall victim to a tax scam. Educate yourself and remain cautious when giving out personal information. If you have questions, don’t hesitate to contact the attorneys at ChapmanAlbin.

Author: Jason T. Albin

Jason Albin is an Attorney and Partner at ChapmanAlbin, the investor rights law firm. He has represented hundreds of investors who have lost money due to broker misconduct, unsuitable investment advice and fraud.​ Jason also represents individuals in “whistleblower” suits filed against unscrupulous companies that try to defraud the US federal and state governments.

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