Whenever there is money on the line, you can be sure someone is trying to cheat the system. Whether you have been a victim of tax fraud or not, we are all affected indirectly by these unscrupulous acts. The Federal Trade Commission has reported that tax fraud cost Americans $1.6 Billion last year with a whopping 2 million cases. So in efforts to help our clients and our viewers, here are a few tips to avoid tax fraud:
1. Keep your information secure – this goes without saying, but with identity theft on the rise, be sure to keep all documents with your SSN, DOB, and bank account information in a safe place or shred documents that are no longer in use.
2. Watch out for Phishing Schemes – phishing schemes are messages or points of contact that request personal information that could be used to scam or defraud you. Often times the sender will disguise the message to look like it’s from a reputable source. Look very closely and if you are unsure be sure to contact a trusted CPA or tax professional. Remember, the IRS never sends emails to the public!
3. File with a recognized tax preparer – The IRS recognizes different individuals who are either lawyers, CPAs, Enrolled Agents and non-credentialed individuals who have completed the Annual Filing Season Program. Be sure to ask you’re preparer if they are recognized and have a valid PTIN.
4. File in a Private setting – often times people go to pop up shop tax preparers at their local grocery store or strip mall because the promise cheaper rates. Although these companies try to reduce the amount of prying eyes, they cannot control every interaction with sensitive information. With almost everyone having a camera or voice recording app on their phones, is your information really safe? Make sure you visit a preparer who can provide a private and intimate setting to better serve you and keep your information safe.
5. File early – with all the efforts you do to keep your information safe, filing earlier may still help you if somehow these scammers still manage to get their hands on your sensitive information. It is still possible to file an amendment later. A lot of scammers try to file as early as possible so they can be long gone with your money before any conflicts arise. Beating them at their own game could save you thousands and countless hours dealing with the IRS trying to remedy this situation.
Always keep these in mind and remember if you have any questions or have been a victim of identity theft, be sure to contact us for more information!