While seeking free tax preparation, be on the alert for scammers. Thousands of filers looking for federal and state tax help lose money and hits on their credit from identity thieves. Criminals may impersonate a tax help provider to receive personal information or a quick payment for fraudulent services. They may use websites to collect banking information or credit card numbers.
For example, a tax assistance preparer should always sign your tax refund. Anyone you pay (or not pay) to do your taxes must have a valid Preparer Tax Identification Number. It is a red flag if a free tax service does not have one or refuses to sign the return.
The IRS does not contact individuals by text, email, or social media channels. Scammers may also call, send mail, or show up in person claiming to be IRS officials.
Emails and text messages may have links about accepting tax refund payments. Scammer websites may ask for personal information, such as Social Security number, driver’s license number, birthday, and address.
Signs of a scammer include the following:
· Demanding payments by wire transfer, gift cards, or prepaid debit cards
· Demanding payment without answer questions or an opportunity to appeal
· Threatening to involve local law enforcement or immigration officers
· Threatening to suspend or revoke business licenses, driver’s licenses, immigration status, or Social Security number
· Payments made to anyone but “United States Treasury”
· Requests for small fees to process refund payments
· Calls from the Federal Depository Insurance Corporation (FDIC) for bank information
· Threatening to put a lien on your home, property, or assets
· Asking for personal information, like mother’s maiden name, passport numbers, or bank PIN codes
The IRS mails notices about owed taxes and payment methods. The IRS will send a notification letter if the case goes to a debt collector.
If a representative comes to your home or business, they will present two forms of official identification; a pocket commission and a government card (HSPD-12).
You can report suspected scammers to the government. Contact the Treasury Inspector General for Tax Administration or the Federal Trade Commission about phone scams. For emails, contact the IRS’ phishing department.
Scammers are not limited by the tax season, as fraud happens all year long. The pandemic and stimulus payments created more opportunities for scammers to pursue personal and financial information.
Similarly, email and text messages may claim to avoid taxes by hiding money through overseas accounts or cryptocurrency. Avoid offers about settling tax debt for pennies on the dollar or prolonging unemployment benefits. Anything that sounds too good to be usually is.