Financial Advisor magazine ran an excellent article about a scam that is being run by people pretending to be IRS agents. One of these scams defrauded more than 5,000 people out of more than $25 million. Here’s how one scam works:
Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting.
Here’s what you must know: the IRS never solicits payments by phone or e-mail. If they need information they will always write a letter first. Do not respond to e-mails that appear to be from the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System.
There are a number of other frauds that involve taxes. A thief may steal your identity and fraudulently file a tax return and claim a refund. There are several ways to avoid this happening to you. First, protect your identity by shredding all documents that contain personal information. Second file early and electronically; electronic filing eliminates paper documents with sensitive information will not get stolen in the mail.
Beware of tax preparer fraud. It is important to choose carefully when hiring an individual or firm to prepare your return. This year, the IRS wants to remind all taxpayers that they should use only preparers who sign the returns they prepare and enter their IRS Preparer Tax Identification Numbers (PTINs).
Beware of “Free Money” from the IRS or scams involving social security.
Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file a tax return with little or no documentation, have been appearing in community churches around the country. These schemes promise refunds to people who have little or no income and normally don’t have a tax filing requirement – and are also often spread by word of mouth as unsuspecting and well-intentioned people tell their friends and relatives.
We protect your identity and work hard to safeguard sensitive financial information. It’s why we provide you with a password protected Lock Box when we send information such as performance reports to you electronically.
For more information, please contact us.