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How to Protect Yourself From Tax Scams

It’s tax season, which means it’s also the time of year when tax scams thrive. Criminals spend the first quarter of the year working hard to swindle individuals and organizations alike, hoping to trick people out of sensitive information and, in some cases, cold, hard cash.

Tax scams are relatively easy to fall for. Some people believe that taxes are simply above their heads. So if an “expert” authority tells them something that doesn’t make sense, they think it’s their own fault for not understanding and go along with it anyway. Similarly, worries that the federal government will come after people over incorrectly prepared taxes make some susceptible to high-pressure threats by people pretending to be the feds.

But don’t worry. The following are a few things you can look out for, and that you can do, to ensure that your money and personal data remain safe from tax scams.

Beat Back Fake Calls

The bogus IRS phone call tax scam is one of the most common schemes. Someone will call you (or sometimes text you) pretending that they’re the IRS, and threaten to suspend your driver’s license or even have you arrested if you don’t make a tax payment to them.

Part of this scam’s success rate is because of its high-stakes nature and the aggressive, make-you-act-before-you-think tactic, but these criminals are crafty, too. In some cases, they might be able to spoof the IRS’ toll-free number to make it seem like they’re actually calling from the Internal Revenue Service, send you a follow-up email to make the scam seem more legitimate, and even provide you with the last four digits of your Social Security number.

But remember the first rule of IRS communications: The IRS will always contact you through the mail first on any tax-related matter. Also, the IRS will never request credit-card numbers over the phone or insist on being paid via a prepaid card and other shady payment methods.

Regardless of whether you think you might owe unpaid taxes to the IRS, if you receive a call like this, tell the caller that you will reach out to the IRS directly. Then hang up and contact the IRS at 800-829-1040 (individuals), 800-829-4933 (businesses) or 877-829-5500 (nonprofits) to determine whether there’s an issue. (You can find a full list of phone numbers, including for international and hearing-impaired callers, at IRS.gov.) You may also consider reporting the incident.

Don’t Fall for Phishing

Scammers will attempt a similar tactic via email, either posing as the IRS or an employer. Sometimes, the goal is the same as the fake calls: get you to send money for supposed tax debt that you don’t actually have. In some cases, they’ll try to get you to give up sensitive information like your W-2.

Again, the IRS will always contact you first via mail, and will rarely use email at any point – certainly not without informing you that they’ll be contacting you that way first. They also won’t request sensitive email via email.

Similarly, your company is very unlikely to ask you for important information about a tax document that they themselves produced and sent out. If you receive an email purporting to be from your company that asks you for sensitive information, talk to your company’s payroll/accounting division to determine whether they actually sent the email. Chances are, they didn’t.

Make Sure Your Accountant Is Legit

Should you use a tax preparer? Absolutely. But you can’t just dump your entire financial life and every shred of sensitive information into just anybody’s hands.

If you’re in the market for an accountant, you need to do your research – and that’s more than searching “CPA” in Google and looking for the nearest listing. Tax fraud can pay off considerably, so scammers have no issue “going big” by falsifying information and outright lying to get their hands on Social Security numbers, Taxpayer Identification Numbers and more.

While it might seem forward and rude, ask to see their licenses, and try to verify what information you can online before sharing anything more than your name with them. Scammers may freak out at that level of scrutiny, but legitimate tax preparers are well aware of the schemes Americans must protect themselves against.

Care to see our credentials? McManamon & Co. is an accounting, tax, fraud, forensic and consulting firm that serves small and midsize businesses, and we’re ready to help you take this tax season head-on. That begins by meeting with you to discuss your needs, as well as any concerns you might have about trusting a new tax preparer for your company or yourself.

Stay out of fraud’s way and put your taxes in the right hands. Call us at 440.892.9088 or contact us online today.

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