While the Livermore police have been busy with the recent scam happening in the Springtown area targeting elderly residents, I think it's worth reminding taxpayers of the income tax scams that they might encounter during the tax filing season or at any time during the year. My advice to all taxpayers is to use caution to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.
The IRS tracks a variety of common scams. Here's a few of these schemes that you should be aware of:
Identity Theft: The IRS has increased its internal reviews to spot false tax returns before tax refunds are issued and they are working to help victims of identity theft refund schemes. They are increasingly seeing identity thieves looking for ways to use a legitimate taxpayer’s identity and personal information to file a tax return and claim a fraudulent refund.
The first notice that a victim receives may be from the IRS informing them that more than one return was filed in their name or that they received wages from an unknown employer and didn't report it as income. If you believe your personal information has been stolen and used for tax purposes, immediately contact the IRS Identity Protection Specialized Unit at www.irs.gov/privacy.
Phishing: Many of us have been on the receiving end of emails that looked real at first glance, even down to the look and feel of a familiar business
logo and website address. These are scams typically carried out with the help of unsolicited email or fake websites that pose as legitimate sites to lure potential victims into providing valuable personal and financial information.
It would be startling to see an email appear in your inbox that looks like it's from the IRS. Keep in mind that the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, like text messages or social media. Also, the IRS will not alert taxpayers to an audit or a tax refund by email or FaceBook
The IRS requests that if you receive a scam email claiming to be from the IRS, forward it to them at firstname.lastname@example.org. Also, if you see a website that claims to be the IRS but does not begin with 'www.irs.gov', forward that link to the IRS at email@example.com.
Return preparer fraud: In 2012, every paid tax preparer is required
to have a Preparer Tax Identification Number (PTIN) and they must enter it on
the returns they prepare. Roughly 60 percent of taxpayers will use tax professionals this year to prepare and file their 2011 tax returns. Most return
preparers provide honest service to their clients. But, like any other business, there are also some who prey on unsuspecting taxpayers. IRS reports that questionable return preparers have been known to attract new clients by promising guaranteed or inflated refunds. Taxpayers should choose carefully when hiring a tax preparer.
One final note: According to the IRS, the number of tax return-related identity theft incidents has almost doubled in the past three years to well over half a million reported during 2011. Don't become a part of these statistics. Take all precautions necessary to protecting your personal information.
Linda Koziol, Enrolled Agent
Visit our Website: www.eastbaytaxpros.com for more tax news.
East Bay Tax Professionals is located at 6400 Village Parkway, Ste. 201, Dublin,
Circular 230 Disclosure: Any advice contained in this post (including any attachments unless expressly stated otherwise) is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.