*First National Community Bank’s blog does not constitute legal, tax, accounting, investment or other professional advice. Recipients should consult their professional advisors for advice.
It’s tax season and this is an important time to be aware of how scammers use the frenzy of filing taxes to target unsuspecting victims. This includes new tax refund scams and classic tax fraud schemes that have been in circulation for years. We have outlined the top 4 scams to avoid during tax season to help prevent tax scams from happening to you.
- Phishing Emails & Phone Calls Asking To Verify Information
Phishing is a common, age old type of scam that involves being called on the phone or sent an email that is designed to steal your personal information. Phishing scammers will call you or send you an email pretending to be from the IRS, often with a threatening tone or urgent subject lines demanding payment.
When you receive a phishing email and click on a link, you’ll end up on a page that looks like the IRS website. However, it is a fake site and any information you enter (your Social Security number, bank account or credit card number) go straight to the scammer. You could even inadvertently be downloading malware onto your device that can steal your information or allow scammers to hack your email without you even knowing!
To avoid being a victim to this type of scam, never give information over the phone and know that IRS will not call you. If you receive a phishing email, check the “From” name before clicking any link in an email. Scammers will change their names to look like they’re coming from the IRS but if you hover over or click on their name, it will reveal their actual email. If it’s not from a .gov address, it’s a scam. For added protection, use an Antivirus program to protect your devices and home network from malware and viruses.
- Unexpected or Unclaimed Refund Scam
Last year the Internal Revenue Service (IRS) posted a consumer alert about a mailing that misleads people into believing they’re owed a refund. The letter looks official but it is not and it includes incorrect IRS contact information and requests sensitive identifying information including, Social Security number, driver’s license photo, bank account information and routing numbers that you must provide in order to “claim the refund.” If provided, the scammer will have all the information they need to steal your identity.
As noted above, this scam happens via email as well, in which potential victims are asked to click a link to confirm personal financial information, allowing your sensitive information to fall into the hands of scammers. Beware of solicitations like this one and remember to only contact the IRS using legitimate methods from their official website. If you wish to check on the status of your refund, you can use the IRS ‘Where’s My Refund’?
- Your Owed Taxes Can Be ‘Eliminated’ Scam
These scams often target high-income individuals in the highest tax bracket in which scammers will claim that your owed taxes can be dramatically reduced or eliminated. Known as abusive tax avoidance schemes, they include predatory deals with investment insurance or involve hiding assets internationally. Taxpayers should beware of any scheme that promotes a dramatic reduction in taxes owed – if it seems too good to be true, it usually is!
- Tax Preparer Fraud
Surprisingly common, tax preparers who commit fraud against unsuspecting victims refine their techniques to become more convincing each year. Illegitimate tax preparers (also known as “ghost preparers”) often set up in a temporary location leading up to tax season and they are gone before you realize you’ve become a victim. They offer extra deductions and credits you aren’t eligible for, drawing you in on the promise of a hefty refund. That refund is then directed to their bank account, and you’re the one investigated for filing a fraudulent tax return.
To avoid this type of scam, only provide personal or tax information to a verified tax preparer. All verified tax preparers have an IRS Preparer Tax Identification Number (PTIN) which you can request. You can also search for them in the official IRS tax preparers directory.
Year after year, tax scams ranging from preparer fraud to identity theft remain among the worst tax scams that affect taxpayers. Being knowledgeable about these and other common tax scams is an important step to ensuring that you do not fall victim. As your locally owned community bank of choice, the success of your financial future is top of mind. We offer Personal Checking Accounts, Money Market, Personal Savings Accounts, CDs, IRAs, Business Loans, Mortgages and Personal Loans of all shapes and sizes and much more! To learn more about First National Community Bank’s financial solutions, visit: fncbank.com
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