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29Mar 2016

Top IRS Scams

You Could be a Target

Schemes to defraud U.S. Taxpayers continue to run rampant. And you could very easily be the next victim. The best way to combat this growing trend and protect your personal information and assets is to ensure you stay up to date on current fraud schemes.

Two of the more popular currently trending fraud schemes involving the IRS and your tax return are tax identity theft and the IRS imposter scam.

What is Tax Identity Theft?

Tax identity theft occurs, for example when someone steals your personal information for use in a fraudulent tax return. Three ways thieves use stolen information include filing a false tax return using someone else’s Social Security number, Claiming someone else’s deductions, such as children or other dependents, and filing a false tax return using the Social Security number and/or other personal information.

Your personal information can be compromised without you even realizing you’ve been scammed. A seemingly endless number of ways thieves acquire your personal information include, but are not limited to, theft of mail and/or tax returns, corrupt tax preparation  “professionals” or phony email solicitations (phshing). Con artists tend to learn and develop their schemes quickly and are ever-evolving. In the case of IRS fraud these thieves are not only stealing money from private citizens, they are defrauding the Federal Government as well.

How Can I Avoid Tax Identity Theft?

There are some steps you can take to help protect you from Tax identity theft. First of all, and perhaps the single best approach is to file your taxes as early as you possibly can. This way you can perhaps, beat the thieves to the punch by filing your legitimate return ahead of their fraudulent one. Second, NEVER provide anyone with personal information unless you know and trust exactly who they are and why they need that particular information. Also, always shred your personal (especially financial) documents, make sure you know and trust your tax preparation professional. Finally, once you’ve filed your tax return, keep a close eye on the status of your return by monitoring it daily on the IRS website.

H5 IRS Imposters

Another popular and seemingly easy way for thieves to acquire your personal information is by posing as an IRS agent and convincing you to surrender your valuable information to them.

They can be very intimidating and sophisticated in their approach, oftentimes telling you that you owe taxes to the IRS and threatening you with arrest and/or deportation if you fail to cooperate; they may even know all or part of your Social Security number. They can rig their caller ID to make it appear they are indeed calling from the IRS. These scam artists will oftentimes try to convince you to put all or part of the amount owed on a credit or debit card. Then, that quickly, they have your credit or bank card numbers and pertinent information, allowing them to rack up massive credit card debt, and/or drain your bank account.

H6 How do I Avoid IRS Imposters?

One of your best lines of defense in combatting IRS imposters is to know what the IRS does NOT do. Some of these things include calling to demand immediate payment of current or back taxes, ask for credit or debit card numbers, or threaten you with local law enforcement. Again, The IRS does NOT do any of these things and these are the exact approaches an imposter will often use.

Cal the tax professionals at MBS Accountancy Corporation and speak directly to a CPA to learn more about IRS scams, or to answer any tax questions you may have.