It’s tax season which means, it’s time to get your paperwork in order, hire a tax preparer, and be on the lookout for tax filing scams. Unfortunately, there are thousands of scammers looking to steal your personal information and your tax refund by pretending to be legitimate tax professionals. It’s important to educate yourself on how to recognize the signs so you don’t fall victim to a tax filing scam. Here are a few tips to keep your money and your personal information safe during tax season.
How do tax filing scams work? In a tax filing scam, a victim will hire an alleged tax preparer to do their taxes. The scammer then uses the victim’s information to file a tax return in the victim’s name. They’ll change some important details on the tax form, such as a checking account number or mailing address, and then collect the victim’s refund. By the time the victim realizes what’s happened, they’ve lost the money owed to them by the IRS and are now vulnerable to deeper identity theft.
How to protect yourself from a tax filing scam. The best way to stay safe from a tax filing scam is to do your research carefully before hiring a tax preparer. First, avoid pop-up ads when choosing a tax preparer, especially those that are riddled with typos. Research any preparers you consider hiring by asking for references of previous clients and by looking for a physical address on their website. Be suspicious if they promise a large return without knowing anything about your finances. Second, before hiring an individual or an agency to do your taxes, ask to see their Preparer Tax Identification Number (PTIN). If the “preparer” refuses to share their PTIN, you’re being scammed. You can also look them up online on the IRS’ Directory of Tax Return Preparers.
Finally, if you’ve already hired a preparer but you’re suspicious about their authenticity, look for these red flags:
• The preparer inflates numbers that affect your tax liability.
• The preparer claims ineligible individuals as your dependents.
• The preparer asks you to sign a blank form and promises to fill out the remainder after you sign.
• The preparer refuses to sign your form.
If your tax preparer follows any of the above practices, terminate your relationship with them immediately.
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What do you do if you’ve been targeted? If you realize that you’ve been scammed after your tax form has already been filed, report it to the authorities as quickly as possible. Let the FTC know about the scam and alert the IRS and tell your friends and family about the circulating scam, too. If you’ve shared personal information with the scammer, take some additional steps toward protecting yourself from further implications. For example, if you’ve shared your financial information with the scammer, such as your checking account details, please contact your financial institution immediately so that they can take the next steps to protect your accounts. If the scammer knows your Social Security number, you are now vulnerable to identity theft and will need to take additional steps to safeguard your personal information too.
Stay alert during tax season and keep your money and personal information safe from scammers!