Protect yourself from tax scams
Tax season is in full swing and many Texas residents are actively filing their taxes on their own or looking for a knowledgeable tax preparer to help them file their 2021 taxes. typical was extended for Texas residents due to the coronavirus pandemic or the February 2021 winter storm, which caused confusion about the deadline this year. Currently, there is no indication that the IRS intends to extend the April 18 deadline of this year for general tax filings.
The IRS continues to aggressively pursue criminal tax evasion cases across the country, with $2.19 billion in tax evasion identified in 2021. Recently, the IRS focused the efforts of its Criminal Investigations Team (CI ) on the exponential growth of cybercrime having an impact on tax. system, with $3.5 billion in cryptocurrency seized in 2021. The IRS says its CI team has seen growing growth in the number of criminals using digital technologies to facilitate Stolen Identity Return Fraud (SIRF ), COVID fraud and other reimbursement fraud using the tax system to receive payments from the government. Instances of data loss from business email compromises, phishing scams and bank account takeovers have also increased.
As consumers gather their tax documents and plan to file their 2021 taxes this year, the Better Business Bureau expects rates of IRS impostor scams, phishing scams and scams to rise ghost tax preparers.
IRS Imposter and Phishing Scams
Imposter scams remain one of the most common scams affecting Texas residents, with nearly 50,000 reports submitted to the FTC in the first three quarters of 2021. Imposter scams are the number one most common scam. reported in the United States in 2021 and account for the most money loss. The IRS reports that consumers lost more than $1.6 billion in 2021, more than the next five most reported scams combined. While only 15% of reports indicate that a loss of money has occurred, those providing money to scammers lose a median amount of $1,000.
While IRS impersonation scams are usually carried out through unsolicited phone calls, scammers also use email to communicate with a potential victim. The prime targets of scammers are people who have an “.edu” email address. The email often displays the IRS logo and encourages recipients to verify their tax refund payment via a provided link, which asks the taxpayer to provide personal information such as social security number, date of birth and its current address. In fact, the website is a phishing scam and the information provided could lead to identity theft or stolen identity return fraud.
Remember that the IRS does not:
- Require immediate payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer.
- Threatening to immediately contact local police or other law enforcement to have the taxpayer arrested for nonpayment.
- Demand that taxes be paid without giving taxpayers the opportunity to appeal the amount owed.
- Unexpected call about a tax refund.
- Send emails about your tax refund or sensitive personal information.
- Initiate contact with taxpayers via email, text or social media to request personal or financial information.
Ghost Tax Preparer Scams
A ghost preparer is someone who poses as a professional tax preparer, often guaranteeing a large tax return when using their services. However, the preparer refuses or conveniently “forgets” to sign the declaration he created on behalf of a client.
By federal law, anyone paid to prepare or help prepare a federal tax return must have a valid Preparer Tax Identification Number (PTIN). Tax preparers are required to sign and include their PTIN on all returns they create on behalf of a paying client. Businesses or individuals who refuse to sign a return are a red flag that they may be fraudulent, leaving the consumer to deal with the IRS over an illegitimate or incorrect filing. Filing a valid and accurate tax return is ultimately the responsibility of the taxpayer, which underscores the importance of choosing a credible tax preparation professional.
It is important to carefully analyze a chosen tax preparation company because of the sensitive personal information provided by consumers, such as SSN, bank account information, home address, and financial assets. BBB recommends that consumers spend time researching tax preparation professionals to determine their credibility and legitimacy. The IRS provides a directory service that lists preparers in a searchable area who currently hold professional credentials recognized by the IRS. Also, use available resources, such as BBB.org, to research accredited tax preparation companies.
Individuals who have been affected by tax preparer misconduct can file a report with the IRS at IRS.gov/tax-professionals and are encouraged to file a formal complaint on the BBB Company Profile. company, as well as submit a report to BBB Scam Tracker.
For more information on how to avoid tax scams and choose the right tax preparer, visit BBB.org/TaxTips