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Beware of These 5 Tax Scams in 2019

The 2019 tax filing season for 2018 returns is in full swing, which means scammers are gearing up for a busy few months of trying to pry your personal data and refunds.

Throughout the year, especially in the months ahead of the spring tax-filing deadlines, the IRS updates the public on the latest schemes used to bilk honest taxpayers out of their money or their sensitive personal information – which they can use, of course, to bilk those same taxpayers out of their money.

2019 is no different, with the IRS floating warnings about several scams, ranging from sophisticated digital attacks to good old-fashioned in-person flimflams.

5 Tax Scams to Beware in 2019

1. Ghosts: Some unscrupulous tax-return preparers that the IRS deems “ghosts” will trick honest taxpayers. Sometimes they’ll trump up a return with bogus deductions and credits to make refunds larger, then charge a percentage of the refund in fees. Sometimes they’ll insist on a client paying in cash. And sometimes they’ll instruct the IRS to direct fees not to your bank account, but theirs. While legitimate preparers must have a 2019 Preparer Tax Identification Number (PTIN) and sign the return, these ghost preparers will not have the number and will refuse to sign the return, and may even ask you to send it to the IRS yourself. (The IRS offers a few tips on how to avoid these kinds of ghost returners here.)

2. Text/SMS Scams: Scammers are increasingly trying to find ways to attack people via texts and Short Message Service (SMS) because people trust this means of communication more. The open rate for texts is almost 100 percent, versus just 20 percent for emails. The important thing to know is that the IRS very rarely uses texts, only for specific reasons, and from just one of two “short codes.” For most issues, the IRS will communicate only through the U.S. Postal Service. When the IRS does send a text, it will be from either 77958 or 38685, and it will contain a security code sent as part of the login process for an IRS online account.

3. Phishing: While email isn’t as effective, scam artists still have enough success that they continue to pepper taxpayers with malicious messages. There are a couple of scams at play here. In one version, a scammer will send you an email impersonating the IRS, typically with instructions to click on an embedded link that purports to send you to the IRS – under the auspices of viewing your tax bill or correcting information. Instead, you will be sent to a fake website where the hacker can gain your personal email.

In other cases, fraudulent emails can be effective simply in getting you to open them. One hack from someone posing as “IRS Online” will have an attachment posing as a “tax transcript.” Opening the email activates a malware called Emotet that can not only infect your computer, but others on your network. (The IRS offers up more details on this scam here.)

Lastly, some scammers will actually imitate tax preparation outfits such as TurboTax. To check to see where the email is actually from, most email providers will allow you to click somewhere near the sender’s name to reveal the actual sender email address.

Again, remember: The IRS will almost always communicate via regular mail.

4. Aggressive Phone Calls: Sometimes a scammer will call impersonating an IRS agent, claiming that you are being audited or outright investigated for fraud. They will immediately try to put pressure on you as soon as you pick up the call, sometimes demanding your personal information, or in some cases, demanding prompt payment over the phone. Not only will the IRS not call you to make initial contact about a tax issue, but it also will not try to collect money from you over the phone.

5. Fake Charities: This scam might start losing a little bit of its luster now that donating to charity is less of a tax perk under the new tax rules, but it still will pop up, especially in times of natural disasters. Scammers will create bogus charity names that sound similar to very real, national charities, then solicit taxpayers for donations. In many cases, those charities will be tied to disaster relief, and will solicit after hurricanes, floods and wildfires. If you’re unsure whether a charity is legitimate, check out the IRS’ online Tax Exempt Organization Search tool.

McManamon & Co. offers professional tax preparation, as well as a host of other tax services, to small and midsize businesses. Not only can we help you avoid scams, but we can keep you within the good graces of the IRS, lining you up for significant tax savings by qualifying for legitimate tax credits and deductions that actually exist.

Call McManamon & Co. at 440.892.9088 or contact us online to find out how we can assist with you tax planning and tax preparation needs.

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