Tax Scams

Five Common Tax Scams to Be Wary of in 2020

It begins with a phone call. The caller claims to be from the Internal Revenue Service (IRS) and pressures you into handing over your money NOW. Don’t believe you’re the only one who has been the recipient of a threatening phone call from a tax scammer. Such aggressive tactics have been used by scammers around the globe. Tax scamming also occurs via email and in person. Let’s look at five common tax scams:

1. Tax Phone Scams

Tax scammers maintaining to be agents from the Tax department will call and tell you that you owe back taxes. They will warn you that if you do not pay now you will be arrested very shortly. To avoid that, you will be told to pay immediately using your credit card, by sending a wire transfer or even a certain gift card. Alternately, the scammer will state that you are eligible for a tax refund and, in order to pay you, will ask you to divulge key personal financial information, such as your bank account or a social security number.

Usually, the scammer will change their caller ID to mirror a real call from the Tax department. They’ll employ fake titles and names and will have Tax employment ID numbers.

2. Phishing

Phishing is the attempt to refer email recipients to bogus websites in order to scam them out of money or their personal information. In this case, those websites look like they belong to a genuine financial institution, bank or even the IRS itself, but they are not.

These emails will ask you to address a tax payment issue, claim a refund or confirm your identity, but the link provided is really intended to steal your personal data. IRS phishing scams can also take the form of email attachments embedded with harmful codes that can damage or breach your digital devices.

Generally, fraudulent emails will claim to deal with the following taxpayer issues or concerns:

You have a tax debt to pay, and must do so immediately by clicking on the link provided

You’re eligible for a tax refund, and can receive details and claim your refund by clicking on the link provided and fill in your personal information

Your credit card or bank account has been compromised, and you can resolve this problem by clicking on the link provided and fill in your personal information

3. Too-good-to-be-true tax preparers

Make sure you do research before agreeing to have someone else help you with your taxes. While large chains like H&R Block are trustworthy, some tax accountants have ulterior motives. They may be out to steal your money while they work out your tax refund status.

The internet is a great way to find out about tax professionals before you give them access to your refund status. Search for referrals and keep alert for any warning signs about the accountant. If you sense something, investigate further.

4. Virus infected tax sites

You may have seen ads on Google for discount tax preparation. Be wary of visiting any such site. While the website itself may assist you with your taxes, it could be compromising your devices at the same time. While you complete your tax forms to obtain your tax refund status, a virus may be accessing sensitive personal data, including your social security number.

5. Offers to move your money offshore

You have probably heard that wealthy business individuals often hold financial accounts offshore. This may make you curious if you get a phone call or email about moving your money to offshore accounts. Exercise caution. This could be another type of tax scam. If you fall for this scam you are likely to lose your money and may even be prosecuted by the IRS.

If you believe you or someone you know has been the victim of a tax scam contact broker dispute for a free consultation. We may be able to help you get your money back.