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Home / Taxes / 2015 Tax Scams You Should Know About

 

Well, here it is again…tax time. The government is looking to pick your pocket and you are looking to keep your pocket from being picked. While you keep a close eye on Johnny Fed, scammers are keeping a closer eye on you. They understand the combination of distrust and fear that the IRS can invoke in people and they feed off it. As with most scams, your best protection is information. To help you, here are some common scams that crop up this time of the year.

Uh-oh, the IRS is calling

In this scam, IRS ”agents” call taxpayers, telling them there is an arrest warrant for them related to back taxes. They are told that the only way to stay out of jail is to go to Walgreens, buy a prepaid debit card with a certain amount of money loaded on it, then call the agent back with the debit card number.

This may sound like an obvious scam, but elderly people are particularly susceptible to it for some reason. If you or a relative receive a call like this and think you may actually owe the IRS money, you can call 1-800-829-1040 to find out.

The IRS is emailing

The IRS never notifies anyone of a tax debt by email because there is no way to prove in court that the email was received or read. The government would not send you an email with a link in it asking for verification of your identity, especially if you are owed money. Yet hundreds of people click on links in emails from the ”IRS”, submit their personal information and have their identities stolen each year.

Some one claims your refund

The point of gathering your personal information in an email is to file a fake tax return in order to get your refund before you do. Once they have filed a fake return, your attempt to get your refund will be rejected. Even though this can be fixed, it is a huge headache. The best way to avoid this scam is to guard your Social Security number at all times.

Beware the monster refund promise

Every year fly-by-night tax preparers set up shop around the country. They guarantee huge refunds and who doesn’t like the sound of that? So how do they get you so much money when no one else can? They file using false information. They often change the information on a return before filing it with the IRS, but after you have signed your return. A large check arrives, some is skimmed off, then you are given the balance. Everyone is happy until the IRS audits you and you can not find the preparer anywhere. Guess who is going to be on the hook for that inflated refund?

The new tax preparer in town

In cities across America thousands of tax preparers appear from thin air. No one has ever seen or heard of them before, but they are offering such amazingly low rates, you can not resist trying their services one time. While some are legitimate new businesses, many are scam artists looking for your refund money and personal information. Your best bet is to use the services of someone you either know well or who is part of a large company that you can verify.

These are only a few of the more common tax scams that may be going around this time of year. There is almost always a stench about the scam if your examine it. The biggest alarm bells should be receiving communication from the IRS in any form other than regular mail, the IRS asking for your personal information during an initial contact, or promises of a larger return than you would normally get. If you think you are being contacted by a scammer, call your local police. They are usually aware of scams that are floating around in your area. Another call to make would be to the IRS at 1-800-829-1040, or research what the IRS calls the Dirty Dozen Tax Scams on their website.

 

About the author: Jerry Coffey

 

Jerry Coffey spent many years in a debt-riddled gray area somewhere between broke and desperately broke. His seemingly endless need for more and more cash led him to payday loans, repossessions, bankruptcy, and depression. After years of the same financial style, he heard a piece of advice that inspired him to find a way to change. The advice: ''The very definition of a fool is someone who continues to do the same things, but expects different results.'' This led him to a much more frugal lifestyle that sees all of his bills paid on time and a growing savings account. Even the seed of a retirement account has begun to sprout.

 

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One Comment

  1. Thankfully our financial situation is rather dull and our taxes are pretty straightforward. We do it as soon as we can every year. But if we owned a business we would probably hire someone to do our taxes because its getting quite complex at that point.

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