How can you protect yourself from tax fraud?

Wendy Shick | 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.

Tell the IRS if your wallet is stolen or your Social Security number is compromised. If your wallet gets stolen or if you notice suspicious activity with your bank account or credit card, you should notify the appropriate banks and request new cards. But do you tell your tax preparer?

You should. To protect you from potential identity theft, we must immediately file a Form 14039. The IRS developed a Taxpayer Guide to Identity Theft to help you if you have any questions or problems.

Don’t fall victim to spam. It’s tax season, which means it’s time for increased “phishing” activity. Please remember that the IRS does not initiate contact with taxpayers by email or any social media tools to request personal or financial information. If you get any kind of email correspondence purporting to be from the IRS, delete it without responding or opening any attachments.

Further, if you get a phone call from someone asking for financial information or Social Security verification, do not give out the information. Instead, ask for the caller’s name and phone number so you can call back and verify that you are, in fact, contacting a government agency.

Beware of a new emerging tax scam. According to WebCPA, the IRS is warning senior citizens, working families, church members and other potential victims to beware of a new tax scam. The scam tempts taxpayers into filing fraudulent tax returns, claiming bogus refunds.

The scammers tell their victims that they have a refund or stimulus payment based on the American Opportunity Tax credit – even if they aren’t enrolled in or paying for college.

To avoid falling victim to this scheme, the IRS says you should beware of any of the following:

  • Fictitious claims for refunds or rebates based on false statements of entitlement to tax credits.
  • Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.
  • Internet solicitations that direct individuals to toll-free numbers and then solicit Social Security numbers.
  • Homemade flyers and brochures implying credits or refunds are available without proof of eligibility.
  • Offers of free money with no documentation required.
  • Promises of refunds for “Low Income – No Documents Tax Returns.”
  • Claims for the expired Economic Recovery Credit Program or for economic stimulus payments.
  • Unsolicited offers to prepare a return and split the refund.
  • Unfamiliar return preparation firms soliciting business from cities outside of the normal business or commuting area.

Learn more about this new scam here.

Of course, this is only the tip of the iceberg. There are countless schemes and scams going around. Contact the IRS or your CPA if you have any questions or suspicions.

Contact Our Ohio Fraud Specialists

Worried that you may be a victim of tax fraud?  Have you received solicitations from would be fraudsters?  Contact Rea & Associates for assistance in determining if you’ve been a victim of income tax fraud.  Our Ohio tax and fraud specialists will review your situation and help you protect yourself.

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