Almost everyone has ended up with at least one suspicious-looking email in their inbox sent by someone trying to scam you out of your money. Internet scams have been around since the inception of the internet, and they’re not likely to leave any time soon. To help prevent individuals from falling prey to these attacks, the IRS releases a list of the top 12 most common tax scams each year. Here are a few of the scams that made the list for 2021:
Fake Charity Scams
This scam relies on and takes advantage of the goodness of people’s hearts. Many businesses and individuals choose to give back through charitable donations. Philanthropy is an excellent use of resources.
Unfortunately, scammers prey upon a person’s instinct to give. The scammers will often ask for contributions over the phone, often under the guise of collecting funds for natural disaster relief. It is imperative that you research the charity before giving them money.
The charity is likely to be fraudulent if:
- They are pressuring you into donating right away
- They ask you to wire money or give them the numbers from a gift card
- They don’t provide their name, mailing address, and website address
To receive a tax deduction, you or your business has to donate to a qualified charity.
Ghost Tax Return Preparers
Many individuals and businesses hire someone to do taxes. Outsourcing your accounting is an excellent choice for your convenience and saving time and effort, but you must do a thorough job of vetting your tax preparer before entrusting them to file your taxes. Scammers will promise you a larger tax refund than you deserve, and then they will make money off of you by billing you contingent on the size of the refund.
The tax returner is likely to be fraudulent if:
- They refuse to sign the return they prepared
- They ask for cash payment
- They claim fictitious deductions, so you get a bigger refund
- They wire your tax refunds to their personal bank account
Phishing refers to a scheme where a scammer attempts to steal your personal information through misleading emails or text messages. Many fraudsters will pose as the IRS or other tax-related companies to gain your trust.
Fake IRS sights linked in the emails or text messages may include malware to gain access to your personal information. Fraudsters will use your stolen data to commit identity fraud to file illicit tax returns.
The email or text message is likely to be fraudulent if:
- They ask for info regarding your personal information, refunds, PIN information, filing status, or transcripts
- They ask for Life Insurance and Annuity updates
- They include the phrase “you are to update your IRS e-file immediately.”
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By choosing outsourced accounting, we will take care of your financial needs so that you can stay well informed and compliant while achieving your business goals. Schedule a free virtual meeting with us today to learn more and get started.