tax scams

Tax Scams: Don’t be fooled

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

By Tax Advocate

Scam Awareness

Don’t be fooled by scammers pretending to be the IRS. Scammers target taxpayers and tax professionals each year in growing numbers. Oftentimes a scammer will contact you by telephone and alter the caller identification to make it look like the IRS or another official agency is calling. The IRS will not call you if you owe taxes without first sending you a notice in the mail.

Scammers may also use a scheme called “Phishing” to falsely lure you into telling them your personal information such as your social security number, bank information, credit card accounts, and more. Scammers will “Phish” for your information by asking you to verify specific details.

Don’t fall for these scams. The IRS provides tips and resources to help taxpayers and tax professionals learn how to spot a scam and what to do if you are a victim of a scam. Learn more about tax scams and how to recognize the signs of phishing and tax scams. It could save you from becoming a victim.

You should report all unsolicited email claiming to be from the IRS or an IRS-related function to phishing@irs.gov.

Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York.  He provides guidance and strategies to improve clients’ financial well-being.

Beware the 2016 Dirty Dozen tax scams

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

By Bankrate

taxes-blog-beware-the-2016-dirty-dozen-tax-scams

It’s not just the Internal Revenue Service that’s trying to get hold of your money. Crooks also are out in force during tax filing season.

These unofficial would-be collectors of your tax dollars are con artists, who over the years have come up with a variety of schemes, some quite sophisticated, to separate you from your cash.

Few new, but persistent ploys

The IRS issues an annual list of the top 12 tax scams. Most of this year’s Dirty Dozen are repeats of schemes the IRS warned about last year, ranging from the continuing threat of tax identity theft to phone scams to phishing.

Heck, the IRS says that sometimes we can’t trust apparent charitable groups or even our own tax pros!

The latest scams that the IRS is watching and wants us to keep an eye on, too, are:

  1. Identity theft
  2. Phone scams
  3. Phishing
  4. Return preparer fraud
  5. Offshore accounts
  6. Inflated refund claims
  7. Fake charities
  8. Falsely padding deductions
  9. Excessive business credit claims
  10. Falsifying income to claim tax credits
  11. Abusive tax shelters
  12. Frivolous tax arguments

Increased efforts to fight ID theft

When it comes to the top tax scam, the IRS points to Security Summit measures implemented this year to make it harder for crooks to steal taxpayer identities and refunds.

The IRS has added more filters to screen suspicious federal returns. Other Security Summit participants, which include state tax departments and the tax software industry, also have beefed up their defenses against fake return files, such as asking for taxpayer driver’s license numbers to help verify that filings are legitimate.

And, says IRS Commissioner John Koskinen, taxpayers must take preventative steps, too.

“We urge people to use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues because scams can take on many sophisticated forms,” Koskinen said. “Keep your personal information secure by protecting your computers and only giving out your Social Security numbers when absolutely necessary.”

If you do find that crooks have your personal or tax information, you can monitor your credit with free tools from myBankrate.

Year-round criminal tax activity

Most of the tax scams peak during filing season. However, tax crooks operate year round.

And schemes that appear to save filers some tax dollars can actually end up costing even more. Once the scam is revealed, victims will owe not only their tax bills, but also penalties and interest.

Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York.  He provides guidance and strategies to improve clients’ financial well-being.

IRS warns again about phone tax scams

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

By Bankrate

taxes-blog-irs-warns-again-about-phone-tax-scams

Benjamin Franklin famously said that the only constants in life are taxes and death.

In today’s world, that saying has morphed into “the only constants in life are taxes and tax scams.”

Aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, according to the Internal Revenue Service itself.

The scam artists purport to be IRS employees and threaten those they call with police arrest, deportation, driver’s license revocation and other things. They can be convincing, using fake caller ID numbers to make it look like it is the IRS calling and utilizing multiple fake agents, complete with phony IRS badge numbers, to reinforce their con.

Not new, but pervasive, scam

It’s not a new tax scam. It appeared back in the fall of 2013. By the next spring federal tax officials deemed it the largest tax scam ever.

The Treasury Inspector General for Tax Administration says it has received roughly 896,000 reports of the fake IRS agent calls, with more than 5,000 victims collectively paying more than $26.5 million to the crooks.

Now with the annual tax filing season underway, the IRS is seeing a surge of these fake IRS agent phone calls.

“Taxpayers across the nation face a deluge of these aggressive phone scams. Don’t be fooled by callers pretending to be from the IRS in an attempt to steal your money,” warns IRS Commissioner John Koskinen.

While the fake IRS agent telephone scam is still leading the tax con parade, there are a wide variety of tax schemes out there.

Many forms of tax scams

Some criminals try the tax carrot instead of stick, offering potential victims the promise of a huge refund. Sometimes the crooks say the tax money is related to a previously unknown investment or lottery winnings.

Regardless of how the tax ploy is pitched, don’t fall for it.

“We continue to say if you are surprised to be hearing from us, then you’re not hearing from us,” says Koskinen.

The commissioner also points out how you can tell the call is fake. The IRS, he says, will never:

  • Call to demand immediate payment. The agency will first mail you a bill.
  • Demand you pay taxes without giving you the opportunity to question or appeal the amount it says you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.
  • Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying your federal tax bill.

Protect your data

One way the crooks make themselves sound legitimate is by using victims’ names, addresses and other personal information. The idea is that by reciting this private information, the victim will believe it’s the IRS because who else would know all that stuff?

The reality is that the crooks do their homework. Hackers get into databases way too regularly nowadays, and the myriad stolen personal information is sold by one crook to others for use in cons like the IRS telephone scam.

Worried about identity theft? Make sure your personal and financial data are secure. You can keep track of your credit with free tools from myBankrate.

And be careful out there — this filing season and year round. The only thing worse than paying taxes to Uncle Sam is paying a fake tax bill to con artists.

Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York.  He provides guidance and strategies to improve clients’ financial well-being.

 

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.