How to Spot a Tax Scam

During the next few weeks millions of tax payers will be sending their tax returns to Uncle Sam. As the economy faces though times, employees are looking for more ways to keep their hard earned money. According to the IRS every tax payer is a potential target for tax con-artists. Knowing how to spot a tax scam can save you a lot of time, trouble, and money.

Difficulty: Easy

Instructions

1. PHISHING SCAMS. In this scam the con-artist will contact you by email with "Tax Refund" or something to that effect in the subject line. The email will ask you to go to a fake website that looks like the IRS website. The site will ask for lots of personal information like your Social Security number, bank account, etc. Once the scammer has this information they then use it to steal your identity. THE IRS DOES NOT SEND EMAILS. ANY EMAIL FROM THE IRS IS A FRAUD.
   
   SOLUTION: Forward the email to the IRS at '[e-mail]'.

2. IRS ANTI-FRAUD COMMISION SCAM. In this scam you receive a phone call (or email) from the Anti-Fraud Commission. There is no such department, you are speaking to a con-artist. The scammer will then tell you that someone used your credit card to pay their taxes. The con-artist will try to get you to give them your credit card number and personal information so they can look into this phony fraud.
   
   SOLUTION: Hang-up the phone.

3. SCAMS RELATED TO STIMULUS PAYMENT. In this scam the con-artist tries to trick the victim into revealing their personal information by calling them and saying they are eligible for the stimulus payment or 'rebate'. If the target doesn't cooperate the con-artist will say they won't get the rebate unless they provide their information.
   
   SOLUTION: Hang-up. If you are eligible for the rebate, all you need to do is file your taxes. You'll receive the payment.

4. DISHONEST TAX PREPARERS. This scam is committed by a dishonest tax preparer. These scammers make money skimming a percentage of their clients' refunds and charging inflated service fees. They attract clients by promising huge refunds. Some preparers even file fraudulent claims, such as fuel tax credits.
   
   SOLUTION: Choose your tax preparer carefully. Remember, if your tax preparer files false claims, the IRS will come after YOU, not them.

5. REPORT FRAUD! It's important that you report any con-artist who approaches you. If you think you're being scammed, fill out Form 3949-A and send it to the IRS. You can download this form at www.irs.gov or by calling 1-800-829-3676.

6. To find out where your refund is, go directly to the IRS website at www.irs.gov and click on Where Is My Refund?

Resources

• IRS
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[AmyRose]

on 3/15/2009 Very well written, nicely organized article, 5* and a recommendation