Common Tax Season Scams and How to Dodge Them

Tax season can be a stressful time for many adults, but unfortunately, it can also be a time when scammers come out to take advantage of unsuspecting individuals. With the rise of technology and the increase in online tax filing, scammers have found new ways to steal personal and financial information from taxpayers. It’s important to be aware of these common tax season scams and know how to avoid them. In this blog post, we will discuss the most common tax season scams and provide tips on how to dodge them.

1. Phishing Scams

Phishing scams involve scammers posing as legitimate organizations, such as the IRS, and sending emails or making phone calls in an attempt to obtain personal and financial information. These emails and calls may seem urgent and threatening, stating that there is a problem with your tax return and that you need to provide personal information to resolve it. They may also claim that you are owed a large refund and need to provide personal information to receive it.

To avoid falling victim to phishing scams, remember that the IRS will never initiate contact with taxpayers via email, social media, or text message. They also will not ask for personal or financial information over the phone. If you receive an email or call from someone claiming to be from the IRS, do not respond or provide any information. Instead, report the scam to the IRS and delete the email or hang up the phone.

2. Fake Tax Preparation Services

During tax season, many individuals seek assistance from tax preparation services to file their taxes. However, scammers have been known to pose as legitimate tax preparation services, offering their services at a lower cost or promising a larger refund. They may also use stolen personal and financial information to file fake tax returns and collect the refunds.

To avoid this scam, be cautious of any tax preparation service that offers a deal that seems too good to be true. Make sure to research the company and read reviews before providing them with any personal or financial information. Also, be aware that legitimate tax preparation services will not ask for your personal information over the phone or via email. It’s always best to file your taxes with a trusted and reputable tax professional.

3. Identity Theft

Identity theft is a common tax season scam where scammers use stolen personal information to file fake tax returns and collect the refunds. This can happen if a scammer obtains your social security number, name, and address, which are all required to file a tax return. They may also use your personal information to open credit cards or take out loans.

To avoid identity theft, be cautious of sharing your personal information online and always shred any sensitive documents before disposing of them. You can also monitor your credit report and bank accounts regularly to ensure there is no suspicious activity. If you believe your identity has been stolen, contact the IRS immediately and file a report with the Federal Trade Commission.

4. Charity Scams

During tax season, scammers may also pose as charities, claiming to collect donations for a good cause. They may use this as an opportunity to obtain personal and financial information from unsuspecting individuals. They may also set up fake websites or use social media to solicit donations.

To avoid falling victim to charity scams, be cautious of any unsolicited emails or calls asking for donations. Be sure to research the organization before making any donations and verify that they are a legitimate charity. If you are unsure, you can also contact the organization directly to confirm if they are seeking donations.

5. Refund Scams

Refund scams involve scammers posing as the IRS and offering a larger refund than what you are entitled to. They may ask for personal information to process the refund or charge a fee for their services. They may also ask you to verify your bank account information to deposit the refund.

To avoid this scam, remember that the IRS will never initiate contact with taxpayers via email, social media, or text message. They also will not ask for personal or financial information over the phone. If you receive an email or call from someone claiming to be from the IRS offering a larger refund, do not respond or provide any information. Instead, report the scam to the IRS and delete the email or hang up the phone.

6. Fake Tax Bills

Scammers may also send fake tax bills to individuals, claiming that they owe money to the IRS. These bills may look official and may even include a fake phone number for you to call to make a payment. If you call the number, the scammer may ask for personal and financial information or request that you send a payment through a wire transfer or prepaid debit card.

If you receive a tax bill that you were not expecting, do not panic. Instead, verify the bill by contacting the IRS directly using the phone number listed on their official website. Do not call the number listed on the bill as it may be a fake number set up by the scammer.

7. Social Media Scams

Scammers may also use social media to target individuals during tax season. They may create fake profiles and send friend requests to gather personal information or post fake ads offering tax preparation services at a discounted rate. They may also use social media to spread phishing scams or solicit donations for fake charities.

To avoid social media scams, be cautious of accepting friend requests from individuals you do not know. Do not click on any links or provide personal information to anyone on social media. If you see a suspicious post or ad, report it to the platform and do not engage with the scammer.

Conclusion

Tax season scams are unfortunately all too common, but by being aware of the most common scams and knowing how to avoid them, you can protect yourself from falling victim. Remember to never share personal or financial information with anyone over the phone, email, or social media. Always verify the legitimacy of a company or organization before providing any information or making a donation. And if you do become a victim of a tax season scam, be sure to report it to the IRS and the proper authorities.

Stay vigilant and informed during tax season, and you can protect yourself from falling victim to these common scams. By following these tips, you can navigate tax season with confidence and peace of mind.