The tax season is in full swing. Such are the tax frauds
Tax season is in full swing – and that means scammers are on the lookout.
Tax fraud usually spikes at the beginning of the year when taxpayers file their tax returns with the IRS. (The tax season started on February 12th.) They also flare up in times of crisis like the Covid pandemic, according to the federal agency.
Scammers could be more active this year than in previous tax return windows, exacerbated by the delayed start of the season, experts said.
“It’s like the perfect storm we’re dealing with,” said Howard Silverstone, a forensic accountant and member of the American Institute of Certified Public Accountants’ fraud task force.
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Much of the fraud is usually related to identity theft, according to tax experts. In such cases, a criminal can steal personal information in order to file a fake tax return and collect your refund.
Taxpayers can also inadvertently share personal information with criminals who falsely claim they can help collect stimulus checks, according to the IRS. Congress is aiming to pass a $ 1.9 trillion Covid Relief Bill that includes $ 1,400 of stimulus checks by mid-March.
“Thousands of people have lost millions of dollars and their personal information to tax fraud,” according to the IRS.
More than 89,000 Americans filed a complaint with the Federal Trade Commission last year alleging tax fraud related to identity theft, according to the consumer protection agency. Identity theft was the most commonly reported type of fraud in 2020, according to the FTC.
Tax identity theft
Criminals often turn to them by phone and email trying to rip off unsuspecting victims.
For example, in an IRS scam, a scammer may pose as an IRS agent and attempt to intimidate callers into revealing confidential information. Phishing scams aim to obtain data such as account information and passwords via fake websites, texts and emails.
However, the IRS is not initiated Contact taxpayers via email, SMS, or social media to request personal or financial information. The agency won’t call to request immediate payment either – officials usually first send an invoice to each taxpayer who owes taxes.
One surefire way to reduce the chances of fraud is to file tax returns as soon as possible.
“We are now in tax season,” said Silverstone. “Don’t hesitate.
“Once you’ve filed your tax return, limit the chance someone else has stolen your identity and do so.”
What should victims do?
There are several steps that Fiscal Identity Theft victims should take, depending on whether the taxpayer is reporting the fraud (e.g. if your electronically filed tax return is denied due to duplicate filing) or the IRS flagging a suspicious tax return with your name on it , according to the agency.
In the latter case, the IRS will send a notice or letter (letter 4883C or 6330C) asking you to verify your identity. You may need to call a toll-free number and possibly visit an IRS Taxpayer Assistance Center.
When reporting an incident, file a paper tax return. Complete an Identity Theft Affidavit (Form 14039) and affix it to the back of your paper return. The IRS can open a case and assign it to an identity theft specialist.
Taxpayers will ultimately receive a notification that their case has been resolved, but it may take a while – generally within 120 days, but complex cases can take at least 180 days, according to the IRS.
Some victims are accepted into the Identity Protection PIN program and receive a new six-digit PIN every year.
Consumers should also check with their state tax authority for further steps at the state level.
You should also consider freezing your credit with credit reporting agencies (such as Equifax, Experian, and TransUnion). These can be increased permanently or temporarily at any time.