Cybercriminals and phony tax preparers are looking to steal your refund dollars. Are you ready to say no?
It’s tax season and that means the scammers are working at full throttle to steal your money. Phone calls and phony tax preparers are all part of a system looking to steal your refund dollars.
Scam artists try all year round to catch unsuspecting victims who are not paying attention to the details of transactions. These scams come in different sizes and shapes. Below are a few of the most common ones that affect you and the IRS.
1. Phone calls from the IRS
The most important thing to remember here is that the IRS will always send you a letter first before they try to call you on the phone. If the person you are talking to is nasty, aggressive and demanding, they are not from the IRS. These tactics attempt to force you to make a payment right now by debit card, credit card, gift card, or wire transfer.
Criminals claim they are employees of the IRS and use fake names and IRS badge numbers. They might even threaten to send police or immigration officers to your home if you don’t make the payments.
Hang up immediately if you receive a demanding call such as this. The longer you talk to them the more confident they become which increases the possibility that they will call back.
If the call makes you wonder if you might owe taxes, contact the IRS directly at 800-829-1040.
2. Calls from the Taxpayer Advocate Service
Thieves make unsolicited phone calls to potential victims and say that they are from the Taxpayer Advocate Service (TAS). The calls may be robocalls leaving a phone number that looks similar to the phone number for TAS. If a potential victim calls the number back, they are immediately asked for their Social Security number or individual taxpayer identification number (ITIN) to find their file.
The TAS can help you if you need assistance resolving an IRS problem, if your problem is causing you financial difficulty, or if an IRS procedure or system isn’t working the way it should. Employees of TAS would never contact you “out of the blue.” You would contact them first.
3. Identity theft
Identity theft occurs when someone steals your Social Security number and fraudulently uses it to obtain your tax refund. This criminal files your tax return as soon as possible in the year and receives your tax refund.
When you or your tax preparer attempts to e-file your current tax return, it gets rejected because a return has already been filed. Another sign is when you get a letter from the IRS saying that you owe tax for a year that you didn’t file a tax return or if the IRS indicates that you have wages reported to them from an employer for whom you did not work.
If your SSN is compromised, complete IRS Form 14039, Identify Theft Affidavit, and attach it to a hard copy of the rejected tax return and mail it to the IRS. In some cases, the IRS may assign you an IP PIN which is a six-digit number to help prevent the misuse of your SSN on fraudulent federal income tax returns. When used in conjunction with your SSN, the IRS will accept your electronic or paper tax return.
You can reduce the possibility of your SSN being compromised by using security software on your computer along with a firewall and virus protection. Don’t open every e-mail that you receive. Learn to recognize which e-mail is legitimate. Delete the others without opening them. Do not download attachments from someone you don’t know.
4. “Ghost” tax return preparers
The IRS requires a legitimate tax preparer to sign the tax returns they prepare and have a current, assigned preparer tax identification number (PTIN). Ghost tax preparers do not have a PTIN and do not sign the tax returns. They print the return and tell the taxpayer to sign the returns and mail or e-file them by themselves.
These thieves may charge high fees based on a percentage of the refund. They may invent income to qualify their clients for tax credits or claim false deductions to get bigger refunds. They also may divert their client’s refunds into the ghost tax preparer’s account.
Make sure that you review your tax returns before you file them. If you are having the refund direct deposited, make sure that the bank account information is yours. The IRS has a “Choosing a Tax Professional” page that has information about tax preparer credentials and qualifications.
5. Scams targeting tax professionals
Cybercriminals search for client data so they can create fraudulent tax returns. They try to obtain client data from the professional’s computer networks. Some basic security steps include the ones mentioned above for individuals such as learning to recognize phishing e-mails and never open a link or any attachment from a person you don’t know.
They also include encryption of all sensitive files and emails and back up for sensitive data to a safe and external source. The IRS has many more suggestions for a tax professional to keep their clients’ information safe and protected.
To protect yourself from scams, be aware of the type of scams that are out there, educate yourself on how to avoid them, and be aware of each transaction in which you are involved.
By MARCIA CAMPBELL | Contributing columnist with THE PRESS ENTERPRISE
PUBLISHED: April 4, 2019
Marcia L. Campbell has worked as a CPA for over 25 years specializing in seniors, trusts, estates, court accountings, and probate litigation support. You can reach her at Marcia@MCampbellCPA.com