Three Mississippi Gulf Coast Tax Scams to Avoid This Fall

The holiday season is just around the corner and your mind is probably busy making plans. It’s doubtful that you are thinking about taxes or tax returns right now. However, just because you aren’t thinking about taxes or tax returns doesn’t mean that tax-related scam artists aren’t thinking about it! Unfortunately, these scammers work year round so it’s best to always be aware of their latest scams and tactics.

The most common tax scam these days is identity theft.

Identity thieves have ways of getting your personal information. They can retrieve personal data by illegally buying or stealing information from individuals, employers, hospitals, nursing homes and various other sources. Once they have your information, the scammers will file a false tax return in your name and claim a refund from the IRS. And the crime of tax identity theft is on the rise!  When this happens, it’s a time consuming processes to clear the legitimate taxpayer’s name. They must endure months of proving that they are who they say they are and ridiculous amounts of time waiting for the backlogged IRS to respond. If you are a victim of tax identity theft, here is what you need to know and what you should do:

  1. Report the identity theft to the Federal Trade Commission at 877-438-4338, ftc.gov/complaint.
  2. File a report with the local police.
  3. Close any affected bank and credit card accounts.
  4. Inform all credit bureaus and consider putting a credit freeze on your accounts.
  5. Contact the IRS Identity Protection Specialized Unit at 800-908-4490 and, if necessary, complete Form 14039. (However, you will need to be patient. Taxpayers have recently waited over an hour to speak with an IRS employee.)
  6. Respond to all IRS notices immediately, using the name and number printed on the notice.

If you receive an email from the IRS…it’s not really from the IRS.

Phishing scammers may pose as the IRS and send fake emails, set up phony websites, or even call you. They are usually offering a fictitious refund, the threat of an audit, or an investigation to lure people into giving out their personal information. Phishers then use the information to steal identities, access bank accounts, or file fraudulent returns.

To protect yourself from phishers, consider the following:

1. The IRS NEVER sends email. If you receive an email from the IRS, it IS a scam.

2. Do NOT click on any links contained in such email messages.

3. Forward suspicious email messages to the IRS at phishing@irs.gov or submit these messages through the IRS website: http://www.irs.gov/uac/Report-Phishing.

4. Never email personal information. Email is not a secure form of communication.

Know who is preparing your tax returns if you outsource this task.

By and large most people who prepare taxes are qualified accountants or reputable tax specialists. But, as with any industry, there are some dishonest people. Sometimes they will skim a portion of your refund or charge unnecessary or unreasonably high tax preparation fees. Some fraudulent return preparers promise tax refunds that are too good to be true. Here is some advice for selecting a tax preparer:

1. Check the tax preparer’s qualifications and history. All paid tax return preparers must have a Preparer Tax Identification Number (PTIN). You can view the preparer’s history via the Better Business Bureau website.

2. Ask about service fees up front. Avoid preparers who base their fee on a percentage of your refund. You should also ensure that your refund is deposited directly into your bank account, not theirs.

3. Never sign a blank tax return.

4. Review the entire tax return before signing.

5. Report abusive tax preparers to the IRS on Form 14157, Complaint: Tax Return Preparer. You can get the form on the IRS website.

If you have been a victim of any of these scams it is important to act promptly. If you have additional questions about tax-related scams or need further advice, please call us now at 877-254-4254 or contact us online at http://www.irsallstar.com/contact-us.