Spotting Tax Scams and How To Avoid Them

posted on Thursday, April 20, 2023 in Financial Tips

Every year, thousands of Americans fall victim to many of the tax scams going on. The good news is there are easy ways for you to spot them so you won’t become a victim yourself. If you want to protect your identity and finances, here are some tips on how to avoid them:

Know How the IRS Contacts People

Criminals and scammers use a wide range of methods and platforms to steal money. They may use telephone calls, text messages, social media, emails, and more to contact you. They will claim that they’re an agent or a high-ranking official of the IRS to scare you into giving your money to them. They will also try to gain as much private information from you as possible.

Always remember that the IRS will never initiate contact with you using these methods, and they will never request your private information. If you have any tax issues, they will send a bill via the US Postal Service to let you know of your situation. If someone is claiming to be from an IRS, take note of the caller’s ID info and report them immediately to the IRS and the Federal Trade Commission.

Pay Your Taxes As Early as Possible

One of the most recommended ways to avoid scams is to file and pay your taxes as early as you can. Criminals may already have enough of your information to file taxes under your name. Filing and paying early prevents scammers from claiming your tax return, making you immune from their tactics.

Beware of Fraudulent Tax Preparers

Sometimes, you may want to consider a helping hand when it comes to your taxes. That’s where a tax preparer comes in. They are professionals who help their clients in preparing and filing general tax forms correctly. Sadly, some would take advantage of people who would want the help of legitimate tax preparers.

If you notice that the supposed tax preparer you’re talking to requests to get a portion of your returns as payment, they may be fraudulent. Another sign to look out for is that they’re guaranteeing you will get a large return. Should you encounter one of these scammers, it’s best to report them immediately to the authorities.

Your knowledge about money and taxes might be the key to protecting you from their scams. Should you ever need help with your finances, talk to one of our C1st representatives today at Community 1st Credit Union.