Tax Scams: How To Recognize & Avoid Them
Tax scams have been around forever and they're getting more sophisticated every day. We can help you recognize the more common tax scams and tell you how to avoid them.
The IRS does not send emails. If you get an email from IRS, you can assume that it is a scam. IRS will only initiate contact with you by letter. A phony IRS email is designed to get your personal information or get you to click through to a phony IRS website that will ask for your personal information. Phony IRS emails can also contain damaging attachments that once opened, give hackers access to your computer.
Fake IRS websites, at first glance, are harder to identify because they steal content from the real IRS website. The real IRS website address is http://www.irs.gov/. Any other website address is a fake. The purpose of these fake websites is to steal your identity. The real IRS website has several pages about how to identify a fake IRS website and how to report them.
Unethical tax preparers typically promise you large refunds or zero or low tax liabilities. As the old saying goes, “if it sounds too good to be true, it usually is.” If you suspect that the fee is unusually high and is somehow tied to the amount of refund you'll be getting or your tax savings, this is an indicator that you may be dealing with an unethical tax preparer.
In most states, tax preparers must be licensed or be a certified public accountant (CPA), an enrolled agent (EA) or attorney. Be aware that there are many unlicensed tax preparers that charge lower fees in order to avoid detection by state regulators. While you may be able to find a good tax preparer whose fee is at the lower range of fees for a given tax return, you will usually get what you pay for – so, buyer, beware.