There’s plenty of paperwork to keep track of during tax season.
Do you have your W-2? How about a 1099 for the other job you have? Or receipts from the medical expenses you incurred in 2016? You think you’ve got enough to worry about? Think again.
The Internal Revenue Service says don’t forget about a whole bunch of scams and schemes that can trip you up, cost you money, steal your identity and turn your life into a terrible slog while you fix things. As usual, Press on Your Side is happy to share advice on how to avoid that.
Here are five of the IRS’ biggest problems to keep in mind during tax time.
- Phishing scams. A big problem in 2016, scammers continue to send out mass emails posing as IRS officials, banks, credit card companies, government agencies or organizations you trust. They hope you’ll click on a link, which leads to a fake website, and enter your personal information, such as Social Security numbers or bank passwords, so they can commit identity theft. Scam emails and websites also can infect your computer with malware, enabling a criminal to gain access to your personal information.
“These email schemes continue to evolve and can fool even the most cautious person,” IRS Commissioner John Koskinen said in a statement.
- Outsized refunds? Unscrupulous tax return preparers may tout inflated tax refunds. They’ll lure victims through promises on flyers, ads, storefronts or in presentations at your church or community hall. And they may convince you into making a claim for a fake rebate or tax credit. They even could file a false return in your name.
“Exercise caution when a return preparer promises an extremely large refund or one based on credits or benefits you’ve never been able to claim before,” Koskinen said.
- Fake charities. Fraudsters may set-up charities with names similar to ones that are familiar, legitimate or well known. You can use a tool on the IRS website to make sure donations to a legitimate charity are tax-deductible. Charities that accept donations from New Jersey consumers also have to be registered with the state Division of Consumer Affairs.
“Fake charities set up by scam artists to steal your money or personal information are a recurring problem,” Koskinen said.
- W-2 scams. Scammers last year began emailing corporate human resources and payroll clerks posing as an executive and asking for all employee names and W-2 forms. Now they’re taking the scam to school districts, chain restaurants, healthcare employers, freight companies and nonprofits, the IRS said. Imposters also are asking the employees to wire money a certain account too.
“This is one of the most dangerous email phishing schemes we’ve seen in a long time,” Koskinen said. “It can result in the large-scale theft of sensitive data that criminals can use to commit various crimes, including filing fraudulent tax returns.”
- Phone scams. Those scary calls, in which someone poses as an IRS investigator and threatens to arrest or deport you unless you pay some fake tax debt, aren’t going away. They remain a “major threat” to taxpayers who generally can expect to see a surge of calls during tax season, the IRS said. Just hang up on these scammers and don’t engage them.
“If you’re surprised to get a call from the IRS, it almost certainly isn’t the real IRS. We generally initially contact taxpayers by mail,” Koskinen said.
- Tax credit scams. Some consumers or return preparers may make a claim for a fuel tax credit, a credit that is generally limited to off-road business use, such as certain boats, trains and airplanes, or in farming and is not available to most taxpayers. It’s considered frivolous by the IRS when used by those who aren’t eligible and can result in a fine of $5,000 and possible criminal charges.
Source: ASBURY PARK PRESS