Tax Return Scams

  • You work hard for your money, and you pay your fair share of taxes. When April 15 rolls around, you want to know that your refund is on its way and will soon be safely in your bank account. Unfortunately, criminals have other plans for your hard-earned money, and they work hard to steal the money you have coming.

    Identity thieves and other criminals love tax season since so much personal information is flowing through the mail and across the Internet. Everything identity thieves need to steal your identity, and possibly your tax refund, can be found on your tax return. Armed with that information, scammers are busy stealing money from hardworking and honest taxpayers.

    The scams keep changing, but there are a couple of common threads. Knowing what to look out for can help you protect yourself from scam artists and keep your money in your pocket.

    One of the best ways to protect yourself from tax refund fraud is to file as early as possible.

    Identity thieves who have managed to gather Social Security numbers through nefarious activities often file fraudulent tax returns with made-up information in an attempt to steal refunds. If the thief files before you do, you may find yourself trying to prove your case to the IRS.

    It is not always possible to file early, but if you can it makes sense to do so. Not only will you get a jump on the criminals but you will get your money earlier as well.

    It is also important to be on the lookout for bogus contacts from the IRS. Thieves have been impersonating IRS agents for years, and this continues to be one of their favorite tactics.

    In many cases, the thieves will contact taxpayers by telephone and tell them they owe additional taxes and penalties. The thief then offers to let the taxpayer pay what they owe, gathering their bank account and routing number in the process. In other cases, the fake IRS agents say they are calling to verify the bank account number so that their refunds can be direct deposited. Those who fall for the scam can see their bank accounts emptied quickly.

    The IRS points out that it does not contact taxpayers by email or by phone. If the tax agency wants to reach you, they will do so through snail mail. Taxpayers who receive emails purporting to be from the IRS can safely delete them. Those who are contacted by phone can feel free to simply hang up.

    Fake phone calls and emails are not the only methods thieves use to capture your personal information and steal your tax refund. Sometimes the threat comes from the tax preparers themselves. There have been documented cases of employees swiping Social Security numbers and other personal information and using it to file fraudulent returns.

    Taxpayers may not be able to totally protect themselves from dishonest employees, but they can deal only with reputable firms. People who have their taxes done by a professional should also monitor their refund status carefully to make sure the money makes it to their accounts. Even better, taxpayers can prepare their own taxes online and avoid the threat altogether.

    People should also exercise caution when sharing personal information with those outside the tax preparation business. Some dishonest employees may try to capture personal information by asking for Social Security numbers, birth dates, and other data. You do not need to share this information; if you have any suspicions you should talk to the manager of the business.

    Avoiding tax refund scams is not always easy, and it pays to be extra vigilant at this time of year. Exercising caution, when asked for personal information and dealing only with professionals, are two ways to protect yourself and keep your money where it belongs.

    ATTENTION: If you are targetted by scammers, you could be at high risk of identity theft. Thieves may impersonate you to take control over or open new accounts, file fake tax returns, rent or buy properties, or engage in other criminal activities in your name. We urge you to obtain identity theft protection service immediately. ScamGuard recommends LifeLock, a US-based identity theft protection company with plans starting from $8.99. Click Here to start your protection.

    5 Signs your identity has been stolen Find out here.

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