Tax Refund Scams & What to Watch Out For - Tax Professionals Member Article By Abundant Wealth Planning LLC
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Tax Refund Scams & What to Watch Out For

Tax Refund Scams & What to Watch Out For

Criminals are not tired of inventing new fraud skills on taxpayers due to the stressful nature of preparing a tax report. The rate at which taxpayers fall victim to scams is alarming, and many are frightened by it. They ask for personal and financial information with the aid of helping you avoid the wrath of the IRS. 

Meanwhile, the information allows them to access your Social Security number or divert your tax returns. They also seek gift cards or fiscal money with the false objective of helping you file your taxes. Fortunately, you can prevent these fraudulent activities if you know the signs of an IRS tax refund scam and are precautious. 

Here, then, are some tax scam excuses used by scammers during tax seasons.


Tax Return Fraud

Those who delay filing their taxes most of the time fall under this scam category. Due to your delay, scammers falsely file your taxes on your behalf to receive the refund you’re expecting. The only way to know is when you file your taxes and discover it has already been filed, not by you. They use little information like Social Security numbers and contact information to file taxes even without using a W-2 form. 

Another approach they use is to send you a tax return lesser than the expected amount while diverting the rest. The neglect of the IRS to know ghost tax preparers makes it easy, although some suspected unscrupulous activities have failed.

 

Unscrupulous tax return preparers

Many ghost tax preparers are creating an opportunity for fake ones. The fake agents file taxes with several mistakes to explore the victim. They have no signature to prove their tax auditing. Some insist you sign it and forward it to the IRS because they can’t. Those using the e-filing system make it difficult as the scammer cannot digitally sign the papers. Every tax preparer has a preparer tax identification number (PTIN) used to finalize the filing. 

Unscrupulous preparers also use their skills on people without a filing system and may or may not be entitled to a refund. They inflate the refund through fake tax credits such as education credits and others. Avoid a preparer that sends back documents without the PTIN.


Phishing Scams

Phishing scammers ask unsolicited questions to get information or money from you. They use a mailing system to send fake IRS letters on tax refunds or stimulus payment status. The mail has a link that directs to a webpage requesting personal information. Sometimes they make calls to someone on behalf of the IRS to negotiate an unpaid debt. To avoid this, know that the IRS sends snail mail to taxpayers, not texts or emails. They may send messages threatening to arrest or force you into paying by credit card or gift card.


IRS Phone Scams

The phone scam is popular and has many parts. 

For example, a scammer may call you based on the need to immediately pay your tax to the IRS to avoid being put behind bars. 

Some use phone spoofing, automatically changing their number to an IRS caller ID. To avoid this scam, know that the IRS never asks for tax filings by phone. Instead, the agency uses the U.S. Mailing system to ask for payment information. 

The IRS advised that when you get such calls, you should hang up immediately and report the number to the agency through phishing@irs.gov.


Tax Settlement Schemes

The IRS set up the IRS’s Offer in Compromise (OIC) program to help unable taxpayers live a free tax life, but the scammers are also taking advantage of it. This fake operation is referred to as mills. 

The scammers claim that taxpayers are entitled to some pennies if they clear up their tax debt. So it is best to visit IRS.gov to get the latest information on the program. And to stay away from adverts placed by individuals.


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