Beware of tax scams and identity thieves posing as IRS agents
Identity theft remains a top priority for the Internal Revenue Service in 2014. This is one of the fastest growing crimes nationwide, and refund fraud caused by identity theft is one of the biggest challenges facing the IRS. This year, the IRS is continuing to take strong actions, both to protect taxpayers and to help victims of identity theft and refund fraud.
More than 3,000 IRS employees are working on identity theft cases. They have trained more than 35,000 other employees, those who work directly with taxpayers, to recognize and provide assistance when identity theft occurs.
You can encounter several types of identity theft involving your tax return. One instance is where identity thieves try filing fraudulent refund claims using stolen identifying information. Innocent taxpayers are victimized by having their refunds delayed.
Be alert to possible identity theft if you receive a notice from the IRS or learn from your tax professional that:
• More than one tax return was filed for you.
• You have a balance due, refund offset or have had collection actions taken against you for a year in which you did not file a return.
• IRS records indicate you received more wages than you actually earned, or your state or federal benefits were reduced or cancelled because the agency received information reporting a change in your income.
Here are some other tax-related scams to be alert for:
• Fake phone calls. A taxpayer may get a phone call, supposedly from the IRS, telling victims they owe money that must be paid promptly through a pre-loaded debit card or wire transfer. A victim who refuses to cooperate is threatened with arrest, deportation or suspension of a business or driver’s license. These scammers use fake names and fake IRS badge numbers. Many times they can accurately recite the last four digits of the victim’s Social Security number. They even have their phones programmed so the victim’s caller ID makes it look like the call is from the IRS. After threatening victims with jail time or driver’s license revocation, they hang up. But soon others will call, pretending to be from the local police or DMV. The caller ID makes these calls appear legit, too.
• Emails from the IRS. These are all scams. The IRS does not communicate with taxpayers by email. If you get an email claiming to be from the IRS, do not open it, and certainly don’t open any attachments. Many of these phony emails contain malicious code that infects your computer or direct you to a bogus form or page made to look like a genuine IRS website.
You can always verify whether or not you really owe anything to the IRS by calling them at 1 (800) 829-1040.
Follow these tips to protect yourself from becoming a victim of identity theft:
• Don’t carry your Social Security card or any other documents that have your Social Security number.
• Don’t give a business your Social Security number just because they ask. Give it only if it’s truly required.
• Check your credit report every 12 months.
• Secure personal information in your home.
• Protect your personal computers by using firewalls and anti-spam/anti-virus software.
• If you file paper income tax returns, take them to the post office for mailing so thieves can’t steal them from your mailbox.
• Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or are sure you know who you are dealing with.
Don’t think this can’t happen to you! We know of at least two people this is happening to. One client’s federal tax refund from 2012 is on hold until the IRS completes its investigation. This process can stretch out over several months and tie up significant amounts of your money.
My goal is to give my clients and the public useful information, explained in plain English, about their finances and taxes. If you have a question you’d like me to answer in a future article, please let me know.
Randy McIntyre is a Certified Public Accountant and a partner in McIntyre, Paradis, Wood & Company, CPAs. He has worked in public accounting since 1977, in Wilmington since 1992. His firm is built on a history of service, technical expertise, and innovative to provide the expertise of larger firms with a personal, one-on-one approach. To learn more about McIntyre, Paradis, Wood & Company, see www.mpwcpas.com. He can be reached at [email protected] or 910-793-1181.
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