Scams have probably been around almost as long as taxes have. So it’s safe to say unsavory people have been employing tax scams for a while now. And as the years have gone by, the tax scams have changed, although the overall objective remains the same: steal money. Here are some of the more popular or dangerous tax scams to be aware of during the 2022 tax season.
Tax Scam #1: Fraudulent E-mails
Scammers can use email in several ways to trick taxpayers. But one of the most common tactics involves an e-mail containing a link for the taxpayer to click on. This then sends the user to a website asking them to “verify” their personal information. Just to be clear, the IRS doesn’t ask for personal or financial information from a taxpayer via e-mail.
Tax Scam #2: Unemployment Benefits
With more money available as a result of the coronavirus pandemic, there’s been a lot more unemployment fraud. Many victims of unemployment fraud don’t realize they’re a victim they receive a 1099-G form listing the unemployment payments they never received.
Tax Scam #3: Filing Your Taxes For You
This sounds like they’re doing you a favor, right? Not so. What’s really happening is that someone is pretending to be you when they file a tax return. They include incorrect information in the hopes it tricks the IRS into sending them your tax refund (and sometimes a refund that’s bigger than you’re entitled to).
Tax Scam #4: Text Messages
Because text messaging has been around for years, the potential for a tax scam via text isn’t new. However, the approach changes with the times. Most of these scam texts include a link for the taxpayer to click and enter personal and/or financial information. These scams are pretty easy to avoid because the IRS doesn’t use text messages to communicate with taxpayers about their taxes.
Tax Scam #5: Fake Tax Preparers
The good news is that most people who say they’re a properly skilled and credentialed tax preparer really are one. The bad news is that some tax preparers that seem legit are far from it. Best case scenario, the “tax professional” can’t come up with the tax refund that they promised. Worst case scenario, they run off with the tax preparation fee and victim’s personal information.
Tax Scam #6: Telephone Scam Calls
Scammers have long used the telephone to trick people into handing over financial or personal data. But these cons required a real person to make a call. Now, scammers use pre-recorded calls. This allows them to reach more potential victims with less effort.
Tax Scam #7: Offer In Compromise
The offer in compromise (OIC) is a special program where the IRS accepts a tax debt as paid in full, but for an amount that’s less than what the taxpayer owed. It sounds like a really good deal for any taxpayer with a large tax debt. The problem is that it isn’t very easy to get. So if someone makes a promise about an OIC that sounds too good to be true, it probably is.
Tax Scam #8: Completing a W-8BEN Tax Form
The W-8BEN sounds funny, but it’s a real tax form for foreign workers. Yet scammers might send a taxpayer this form and ask them to return it to the scammer. And one way scammers take advantage of the victim is by modifying this form to ask for additional financial or personal information.
Tax Scam #9: Social Security Number
In this scheme, the con person will contact the victim and claim to suspend or cancel the victim’s Social Security number. But the scammer will say this can be avoided if the victim sends them money or personal information instead.
Tax Scam #10: National Disasters and Charities
With so many deadly and damaging natural disasters, it’s understandable that people will step up to help. Much of this help comes in the form of monetary assistance, especially to charitable organizations. And one way these “charities” try to convince people to “donate” is to remind them that their donation is tax-deductible.
The good news is Kienitz Tax Law is here to help you with your tax issues. Schedule your FREE consultation today!