Computer savvy and creative crooks are getting filthy rich preying on unsuspecting victims. We have all heard about invasions of the computer networks of huge companies with the theft of personal and sensitive information. For example, hundreds of thousands of Anthem Blue Cross clients suddenly discovered that their names, addresses, social security numbers and other confidential data were stolen during a computer breach originated from another country.
I was one of those victims and have since spent considerable time and aggravation because two federal tax returns claiming refunds were filed under my name. I discovered that trying to prove that I was actually the victim was far from a simple task. Nothing could have been done by me to prevent this fraud but many other frauds could easily be avoided. Hopefully, the following “heads up” of other common scams will help keep you from becoming a victim.
Revenue Service commissioner John Koskinen said, “Criminals continue to look for increasingly sophisticated ways to breach the tax system.” The most common pitfalls listed from the IRS’ annual “Dirty Dozen” list of the most common tax scams for 2016 are as follows:
Phone Scams: Phone calls from criminals impersonating IRS agents threatening taxpayers with lawsuits, attachment of property, garnishment of wages, police arrest, deportation and license revocation if taxes are not paid directly to the alleged IRS listed address immediately.
Phishing: Fake emails or websites looking to steal personal information. Never respond to or click on such requests claiming to be from the IRS. They are a scheme to steal personal information including passwords and social security numbers. They often pose as people or organizations you know and trust, such as a bank, credit card company or government agency. The scam emails may infect your computer with malware that allows scammers access and the ability to track keyboard strokes to gain sensitive information.
The IRS only contacts taxpayers by U.S. mail about a bill or refund and never by email.
Return preparer fraud: Unscrupulous return preparers set up shop during filing season to perpetuate refund fraud, identity theft and others scams. Anyone promising inflated refunds, charging fees based on a percentage of the refund, or asking you to sign a blank return should always be avoided. They often advertise by flyers and phony store fronts.
Fake charities: Phony charities with names similar to familiar or nationally-known organizations often solicit donations at portable tables in front of legitimate businesses. Contributions will not be deductible.
Abusive tax shelters: Tax shelters that look too good to be true are probably frauds. They put up a red flag for the IRS to investigate and likely scrutinize your entire tax return during an audit, resulting in large penalties or worse.
Large corporate computer invasions such as the ones at Anthem Blue Cross, Sony and others are impossible to avoid but carefully checking your credit card and checking account transactions regularly to spot fraudulent entries will allow you to file a complaint in a timely manner. A red flag might be an inordinate delay at a restaurant in a mall after you give the waiter your credit card and before he returns with your receipt. While you enjoy your desert, he may be shopping next door with your credit card.
One rarely suspects to become a victim of such frauds but they are all common and increasing in frequency. Be forewarned and aware. Prevention is always better than seeking restitution after discovery.