tax fraud schemes

There's not much more to say about tax scammers than has already been published, but taxpayers need to be wary of thieves who want your identity and your money. If it sounds too good to be true, then it's most likely a scam. At the top of the IRS's list of scams targeting taxpayers this year are:

  • erroneous refunds
  • phone calls from the IRS or debt collectors
  • phishing and malware schemes (a means of obtaining your personal information by posing as a trustworthy entity)
  • bogus emails
  • scams which actually target legitimate tax preparers

This year there's a new twist on the old "stolen refund" scam. It appears that scam artists file a return in your name, then deposit the refund in your personal checking account. A short time later you'll receive a threatening phone call from the thief, pretending to be from the IRS or posing as a debt collector, warning you a refund was deposited erroneously into your checking account, and that you must repay the amount. These criminals demand repayment in the form of prepaid debit cards, iTunes cards (they don't need the physical card to use it; just the number), or money orders. They may also tell you that failure to comply with their demands will result in your immediate arrest.

The IRS clearly states they will never initiate contact with a taxpayer via email or phone for any taxes owed. If you get a phone call, just hang up! Contact the IRS immediately because you will have to repay the money placed in your account; however, let the IRS explain the procedures involved for returning the money. Former IRS Commissioner John Koskinen advises, "Taxpayers should stay alert to new schemes which seem to constantly evolve. I urge everyone to do all they can to avoid these tax pitfalls, whether old or new."

Make sure you do your homework when donating to charities. Fake charities crawl out of the woodwork during tax season. These criminals want to take advantage of your generosity and take your money or private information. Due diligence is paramount when considering any donation. IRS.gov can help you check the status of any charitable organization. Do not give out your personal information, any financial information, or your Social Security or credit card numbers to anyone who solicits a contribution by phone or email. Never send cash or wire money to these scam artists. Once you send it, you can't get it back!

A popular technique by scammers is to send bogus emails. If you open their email and click on a link, you are then directed to a bogus website where they will request your personal information. It might look legitimate, but again, the IRS will never contact you by email. Never open an email claiming to be from the IRS. Delete it immediately.

Cybercriminals are also stealing data from reputable tax preparers' computers in an attempt to gain private, personal information and file fraudulent tax returns. Preparers are urged to increase their security measures and report any data theft immediately to the IRS.

If you are preparing your own taxes and using commercial tax preparation software like TurboTax, TaxSlayer, H&R Block, or others, NerdWallet.com is an excellent resource to help you select which software option is best for you. Be sure to use your own computer, keep your PIN private at all times, guard your password, install antivirus software before beginning, and restrict unauthorized access to your computer. Whenever possible, use a secure wireless network.

Regrettably, these scams can happen to anyone. You can find a complete list of this year's "Dirty Dozen" tax scams by going online to IRS.gov. Please be vigilant and aware this tax season, as we hate to see our members being penalized for being too trusting. If you ever have any questions or concerns regarding the legitimacy of a transaction, please contact local law enforcement, the Better Business Bureau, or VacationLand Federal Credit Union at 800-691-9299.

VacationLand Federal Credit Union prides itself on making a positive impact in our community by encouraging employees to make a difference in our members’ lives. Why not join VacationLand Federal Credit Union's winning team of professionals and discover a rewarding career? Apply online today.