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Here are the top scams to avoid during tax season

Karin Grablin
Karin Grablin

The IRS recently released its annual list of the top tax scams impacting not only individual taxpayers but tax preparers, as well as company payroll departments.

Here is the list (in order of most prevalent) of what they are and what you can do to help prevent them from happening to you:

1. Phishing schemes: Fake emails or websites designed to trick you into revealing personal information (such as Social Security, credit card or bank account numbers) or your login or password information. Remember, the IRS never sends out e-mails asking for this information, and your bank shouldn’t, either. If you don’t recognize the sender of the e-mail, either delete it or be wary about clicking on any attachments/links in those emails.

2. Phone scams: Calls or messages from those impersonating IRS agents and threaten police arrest, deportation or license revocation if you don’t comply with handing over confidential information. This activity increases during tax season, when taxpayers are most vulnerable. Note: the IRS usually initiates contact with taxpayers by mail (not by phone) and does not make these kinds of threats when attempting to collect taxes. Verify the legitimacy of any phone message by offering to call them back and contact the IRS directly (800-829-1040) before taking action.

3. Identity theft: This happens when scammers file tax returns pretending to be you or steal personal and financial data from you or your tax preparer. Shred your personal data after use, get a P.O. box for receiving important mail, never put confidential outgoing mail in a neighborhood mailbox. Also, confirm with your tax preparer how they safeguard your information.

4. Return preparer fraud: Phony tax return preparers, trying to perpetrate refund fraud and identity theft. Be wary of preparers who guarantee large refunds, and make sure to never sign a blank tax return. The IRS website (irs.gov) has a list of tips to follow when choosing a tax preparer if you don’t have a good local resource for finding one.

5. Fake charities: Scams to steal money and personal information from unsuspecting (but charitable) taxpayers. Often the names used are similar to well-known charities, or their websites look like legitimate charities. Before you donate to a charity you don’t know well, check out Exempt Organization Select Check on the IRS website (irs.gov/charities) to make sure they are legitimate.

6. Falsely inflating refund claims: Criminals posing as tax preparers who contact elderly or low-income taxpayers who don’t normally file tax returns and offer to file tax returns for them, claiming inflated refunds (and then stealing them). Scam artists also file returns claiming phony earned income tax credits, education credits or inflated deductions – to get larger refunds that they can steal. If you haven’t filed a tax return – or filed for these kinds of credits/deductions in recent years – you might want to call the IRS helpline (800-829-1040) before signing your return.

Every taxpayer has a fundamental set of rights when dealing with the IRS. These are known as the Taxpayer Bill of Rights. While it’s good to familiarize yourself with these rights, it’s also important to realize that every taxpayer is ultimately responsible for the contents of his or her tax return, so be mindful of the steps you need to take to protect yourself this tax season and throughout the year.

Karin Grablin, CPA, is with SRQ Wealth Management, 1819 Main Street, Suite 905 in Sarasota (941-556-9004 and karin@srqwealth.com) and is a registered representative and investment advisory representative with, and securities and advisory services offered through LPL Financial, a registered investment adviser. Member FINRA/SIPC.

This story was originally published March 13, 2017 at 1:30 PM with the headline "Here are the top scams to avoid during tax season."

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