Taxes needn’t be tough. When you boil it down, if you’re preparing your taxes, you compile everything you can deduct and try to save as much as you can.
But thieves know that they can get into your financial life by pressing the fear and hacking buttons. Although everybody wants some money back from the IRS, almost no one wants to hear from the agency.
Swindlers also know that they can tap the mother lode of financial information through your tax forms. Once they steal your information, they can do anything from get fake refunds to opening up credit cards. They also sell your information to other thieves.
That’s why you need to be more vigilant than ever during tax season. You need to zealously guard your information — and tell your preparer to do the same. Here are the four worst tax scams, according to the IRS, and what you can do to protect yourself.
Phishing: Taxpayers need to be on guard against fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about a bill or refund.
Don’t click on one claiming to be from the IRS. Be wary of emails and websites that may be nothing more than scams to steal personal information.
Phone Scams: Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as con artists threaten taxpayers with police arrest, deportation and license revocation, among other things.
Identity Theft: Taxpayers need to watch out for identity theft, especially around tax time. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security number. Though the agency is making progress on this front, taxpayers still need to be extremely cautious and do everything they can to avoid being victimized.
Return Preparer Fraud: Be on the lookout for unscrupulous preparers. The vast majority of tax professionals provide honest, quality service. Yet there are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers.
You should also be on the lookout for fake charities, preparers promising outlandish refunds and promoters of offshore tax shelters and “protests” to avoiding paying taxes altogether.
“Perpetrators of illegal schemes can face significant fines and possible criminal prosecution,” the IRS says. “Taxpayers should keep in mind that they are legally responsible for what is on their tax return even if it is prepared by someone else. Be sure the preparer is up to the task.”
Although the IRS is not going to be your best source for complex tax questions, the agency has been particularly active to inform taxpayers on scams. For more information on identity theft scams, click here.
Want to go the extra mile to protect your financial information? Use strong passwords, check your credit reports on a regular basis and review all account statements closely, according to fivecentnickel.com.
And if you file your taxes electronically? Make sure you obtain a personal identification number (PIN) from the IRS before you file. It will save you a lot of hassle.