Posts Tagged ‘tax scam’

Is It A Charity Or A Scam?

Tuesday, February 3rd, 2015

Remember when writing a check to a charity left you with a feeling of satisfaction and accomplishment? Unfortunately that feeling has been replaced with vulnerability and uncertainty as soliciting for fake charities has become a common way for scammers to prey on the generosity of strangers.

Remember when writing a check to a charity left you with a feeling of satisfaction and accomplishment? Unfortunately that feeling has been replaced with vulnerability and uncertainty as soliciting for fake charities has become a common way for scammers to prey on the generosity of strangers. Before you tear that check from your checkbook, take another look at the “Pay to the Order Of” line. That person who just spent the last 15 minutes explaining why your donation is critical to their organization might have less-than-admirable intentions.

Every year the Internal Revenue Service (IRS) warns taxpayers about what it considers to be the “Dirty Dozen” of tax scams. The annual report identifies schemes that appear to be more prevalent during filing season. And while you may be inclined to use some of your refund to help a worthwhile charity, the IRS reminds taxpayers to remain vigilant against scammers “masquerading as a charitable organization to attract donations from unsuspecting contributors” – particularly this time of year when scammers appear to be more active.

If you are approached by somebody who claims to be soliciting money for charity, here are a few tips to ensure that your money will be used for a worthwhile cause.

What’s In A Name?

Sometimes fake charities will adopt a name that’s similar to one you are sure to recognize and consider to be a respected organization within your community or nationwide. Even if you are confident that the not-for-profit you are about to donate to is reputable, a quick online search can remove any doubt. The IRS provides access to a search tool designed to help the public identify valid charitable organizations. You can also find registered 501(c)(3) organizations on Guidestar, an online tool that provides users with data and information about tax-exempt organizations and other faith-based nonprofits, community foundations and other groups typically not required to register with the IRS.

Keep Personal Information Private

Nonprofit organizations do not need your Social Security Number to complete the transaction, nor do they need to retain it for their files. So if someone claims to represent a charity and asks for any of your personal information (including passwords) – don’t give it to them! Scammers use this information to steal their victim’s identity. Protect yourself from fraud and remember to keep your personal information private.

Where’s The Proof?

When you make a decision to donate to a tax-exempt organization, make sure to have proof of the transaction. For your own security – and for tax record purposes – you should never make a cash donation. Use a check or credit card every time you give money to charity. Doing so not only proves that you made the donation; it will help you claim the contribution on next year’s tax return.

Ask An Expert

A trusted advisor can help you identify whether a particular charitable organization is reputable or not and can help you make the most of your donated dollars. Email Rea & Associates for more information.

By Maribeth Wright, CPA (Cambridge office)

 

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When Scammers Demand That You Pay Up, IRS Says You Should Hang Up

Monday, August 18th, 2014

More than 1,000 American taxpayers have collectively lost about $5 million as a result of a recent phone scam that has been reported to be active in virtually every corner of the nation. The Internal Revenue Service (IRS) reminds everybody to be vigilant, to never give personal financial information to anybody over the phone, and to report instances of phone scams to the IRS and/or to the Treasury Inspector General for Tax Administration (TIGTA).

According to IRS Commissioner John Koskinen, “Taxpayers should remember their first contact with the IRS will not be a call from out of the blue, but through official correspondence sent through the mail. A big red flag for these scams are angry, threatening calls from people who say they are from the IRS and urging immediate payment. This is not how we operate. People should hang up immediately and contact TIGTA or the IRS.”

To date, more than 90,000 complaints regarding the scam have been made to the IRS and TIGTA.

Signs of An IRS Phone Scam

A media release, sent Aug. 13, reports that scammers will use fake names and IRS badge numbers, are able to recite the last four digits of a victim’s social security number, and spoof the IRS’ toll-free number on caller IDs so that the calls appear legitimate. Victims reported that they were threatened with jail time or driver’s license revocation if they refused to comply with demands. After hanging up, scammers call back claiming to be local law enforcement or a DMV representative. The second phone call is supposed to reinforce their original claim and demands.

Don’t Be An IRS Phone Scam Victim

  • If you think you might owe taxes or that there may be an issue with your taxes, call the IRS directly at (800) 829-1040. An authorized IRS representative can help you determine if you have a payment due.
  • If you get a suspicious call from someone claiming to be from the IRS and you know that you have no IRS issues, report the incident to TIGTA at (800) 366-4484. You should also contact the Federal Trade Commission and use its “FTC Complaint Assistant” at FTC.gov. Be sure to add “IRS Telephone Scam” to the comments of your complaint.
  • Don’t let scammers catch you off your guard with questions about your tax history. Call your CPA and be confident about whether you owe money to the IRS or not. When it comes to your financial security, take a proactive approach.

Email Rea & Associates if you’re ever unsure about anything you received from the IRS, whether it is a letter, a phone call or an email. We can help you determine if the inquiry is legitimate.

By Maribeth Wright, CPA (Cambridge office)

 

Looking for other articles on how you can protect yourself and your business? We recommend these:

How Can I Protect My Business From A Data Security Breach?

Are You Secure? Cyber Security Targets Employee Benefit Accounts

How Do You Protect Yourself From Identity Theft?

 

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How can you protect yourself from tax fraud?

Friday, March 16th, 2012

Tax identity theft is an increasingly enormous problem. The IRS has been bombarding us with warnings of identity theft and scams this tax season.

Here’s a summary of some of the latest information you should know. (more…)

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