Tax season can be a stressful time for many, but it’s also prime time for scammers looking to take advantage of unsuspecting taxpayers and tax professionals. Protecting your financial and personal information is crucial, so here’s a rundown of common tax scams to watch out for:
Social Media Scams
Social media is flooded with information, but not all of it is trustworthy. Fraudulent tax advice and forms can lead to false claims for refunds or credits, like the Employee Retention Credit. If a tax tip sounds too good to be true, it probably is. Stick to reputable sources and follow the IRS on X (@IRStaxsecurity) for reliable updates.
Third-Party Online Account Scams
Scammers might offer to set up your IRS Online Account for you, only to steal your personal information. Always create and access your IRS account directly through IRS.gov to ensure your information remains secure.
Phishing and Spearphishing
Be wary of emails or texts claiming to be from the IRS. These phishing attempts are designed to steal your personal information. Tax professionals, in particular, should be vigilant to prevent data breaches. Remember, the IRS never initiates contact via email or text to request personal or financial information.
Unscrupulous Tax Preparers
Not all tax preparers have your best interests at heart. Watch out for those who base their fees on the size of your refund or refuse to sign your tax return. Avoid “ghost” preparers who don’t include their IRS Preparer Tax Identification Number on your return. These are major red flags of potentially dishonest practices.
Offer in Compromise Mills
Some companies claim they can settle your tax debts for less than you owe but charge exorbitant fees for services you can get directly from the IRS. To see if you qualify for an Offer in Compromise, use the free IRS Offer in Compromise Pre-Qualifier tool on the IRS website.
Employee Retention Credit Scams
Promoters might mislead businesses into improperly claiming the Employee Retention Credit. If you’ve been swayed by such a promoter, the IRS advises you to quickly start the claim withdrawal process for any unpaid ERC claims.
Awareness is your first line of defense against tax scams. Always verify information through trusted sources, be skeptical of offers that seem too good to be true and protect your personal and financial details. By staying vigilant, you can safeguard your finances and avoid falling victim to these common scams.