by Chelsea Springli 
It’s tax season. This 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 who are 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 hires 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 has happened, they’ve lost the money owed to them by the IRS and are now vulnerable to deeper identity theft.
Sometimes, the alleged tax preparer determines that you owe money instead of getting a refund. They might insist you pay in cash so they can easily pocket your money and not file your taxes. Not filing your taxes on time will lead to extra fines and penalties that you must pay.
What Other Scams Affect My Taxes?
Unfortunately, scammers are tricky and may try to victimize you through a different scam related to your taxes. Here are some examples.
- Credits and refunds misinformation: Dishonest tax prepares misrepresent the qualifications for claiming tax credits. They will likely charge large fees to help you claim the credit, even if you are not eligible.
- Unclaimed tax refund: Scammers may impersonate the IRS to convince you that you have an unclaimed tax refund. They’ll ask for your personal information and bank account numbers to take your money.
- W-2 fraud: Inaccurate information on how to get a large tax refund will ask you to change the amount of income or withholding when you file. They’re really causing you harm later from your inaccurate reporting.
The IRS website provides more details about these types of scams.
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 contain typos. Ask for references from past clients and confirm that the preparer has a verifiable physical business address. Be suspicious if they promise a large return without knowing anything about your finances. 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, this is a scam. You can also look them up online on the IRS’s 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.
Pro Tip: As a credit union member, you have access to exclusive discounts at TurboTax and H&R Block.
What Should 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, alert the IRS, and tell your friends and family about the circulating scam, as well. If you’ve shared personal information with the scammer, take additional steps to protect yourself from further impacts. 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!
