4 Common Tax Scams To Be Aware Of

October 8, 2020

Tax scams can happen at any time in a variety of ways. Your Encino tax consultants want you to know that the IRS never calls, texts, or emails: they send letters only. Learn more about common tax scams to avoid losing money and giving out your personal information. 

Natural Disaster Scams

Some scammers use natural disasters such as the recent California wildfires to steal money from taxpayers who want to help. The IRS created International Charity Fraud Awareness Week for this reason that encourages nonprofit representatives, volunteers, staff, and trustees to spread awareness about natural disaster scams and other fraud issues in the name of charitable organizations. 

Telephone Scams

As previously mentioned, the IRS does not call taxpayers demanding money from back taxes. Scammers typically use scare tactics to trick people into “paying their debts” with gift cards or wire transfers, such as saying they will be arrested if they don’t pay. These people often ask for credit or debit numbers over the phone as well, or claim they have the power to cancel the receiver’s Social Security Number. 

Ghost Preparers

While the tax prep experts at your Los Angeles accounting firm are among the many reputable people providing assistance, some are unscrupulous. Known as “ghost preparers,” they usually require payment in cash in exchange for services. These individuals do not have Preparer Tax Identification Numbers, or PTINs, for the tax year, and might also funnel tax refunds into their own accounts among other illegal activities. 

Tax Scams Are Not Limited to Tax Season

While scammers work extra hard during tax season to steal money from innocent taxpayers, the IRS emphasizes that these thieves work year-round to take what’s not theirs. In addition to assorted phone scams, such people use email phishing and malware to steal money and personal information. Faux tax agencies remain another common problem. 

No legitimate tax preparer or IRS agent will contact you using threatening language and or demanding Social Security information and money. If you are unsure about your tax status, call the number on the billing notice or the IRS itself. You can also review your tax information through the official IRS website. 

For tax and accounting help, talk to the team at Wallace & Associates, your Los Angeles accountant service.