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Avoid Tax Fraud In 2017

Tax season is already upon us, which means scams will continue to increase over the first few months of 2017. Tax scams usually fall under three categories: fraudulent returns, phone scams, and phishing scams. This Tuesday Tips will help you identify the most common types of tax related fraud, and how to prevent yourself from falling victim in 2017.

Common Tax Fraud Scams & Tips To Keep You Safe

Tax Fraud Scam #1: Fraudulent Returns
The amount of fraudulent tax returns has increased over the past few years; however, the IRS has been able to step up its efforts to combat scammers’ efforts. The IRS was able to detect 35,000 fraudulent returns during the first few months of 2016, and prevented $193.8 million in fraudulent returns. Despite this effort, there’s still a chance your identity could be used to file a fraudulent tax return.
How to prevent it: Though having a fraudulent tax return completed in your name is not completely avoidable, there are things you can do to help prevent this from happening such as:

  • File your tax return as soon as possible. Since the IRS only accepts one tax return per social security number, it makes it nearly impossible for a scammer totax fraud file a fraudulent return with your information.
  • To prevent fraudulent tax returns in the future, be stingy about where you give out your social security number, make it a habit to check your credit report, and make sure to shred all documents that contain sensitive personal information..

Tax Fraud Scam #2: Phone Scams

One of the most common types of tax related scams are phone scams where crooks place call pretending to be IRS agents. According to News Week, phone scams have cost consumers $23 million over the course of the past few years.  In some instances consumers’ caller ids even read, “IRS-IMPORTANT.”
How To Prevent:
Know the IRS will never:

    • Call you and demand immediate payment.
    • Call you before first mailing you a bill.
    • Demand that you make a payment without providing you with an opportunity to appeal.
    • Require a specific payment method.
    • Ask for your credit card or debit card number over the phone.
    • Threaten to have you arrested for non compliance.

Tax Fraud Scam #3: Phishing Scams
During the 2016 tax season the IRS saw a 400% increase in phishing and malware related scams. This means it’s highly unlikely for these types of scams to decrease in 2017. In most instances these scams come in the form of email, but can also be sent via text message. In both instances, victims are tricked into thinking the messages have come directly from the IRS. Many of these emails and text messages look highly sophisticated and legitimate, and may even direct you to a website that looks very similar to the official IRS website (www.irs.gov). One of the most popular types of tax related phishing scams comes in the form of an email that appears to be from the IRS. This email will contain links, taking victims to a fake website designed to mirror the real IRS website. This email will ask that you update your IRS e-file immediately, and as a result, steal your information. Thankfully these types of scams are avoidable if you know what to look for.
How To Prevent:

    • The IRS does not initiate contact with taxpayers by email, text, social media, or any messaging service.
    • The IRS’ website is www.irs.gov, and any legitimate page on the IRS’ website will begin with irs.gov. Do not be confused by other close variations such as irsgov, irs.net, irs.org, etc.
    • If you receive an email from a sender claiming to be the IRS, and you weren’t expecting one, do not reply to the email. In addition, do not click on any links within the email or open any attachments. All unsolicited emails from the “IRS” should be sent to phishing@irs.gov.

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