BBB Shares Tips on How to Avoid Tax Scams

BBB Shares Tips on How to Avoid Tax Scams

As tax season approaches, Better Business Bureau (BBB) serving Middle Tennessee and Southern Kentucky is issuing a warning to the public about potential tax scams. The organization, committed to promoting trust and transparency in the marketplace, urges individuals to be vigilant and take precautions to avoid falling victim to fraudulent schemes.

Robyn Householder, President & CEO of Better Business Bureau Middle Tennessee, and Southern Kentucky highlighted the increased prevalence of scams during tax season. “Scammers become more active, employing creative tactics to target busy Americans. Individuals must stay informed and alert to protect themselves from falling for these tricks,” said Householder.

The most common scams during tax season include:

1. IRS Impersonation Scams: Scammers initiate contact through phone calls, posing as IRS agents. They falsely claim that the individual owes back taxes and threaten arrest and fines unless payment is made immediately via debit card or wire transfer.
2. Tax Identity Theft Scams: Criminals use stolen social security numbers to file tax returns in the victim’s name, collecting refunds fraudulently. This often occurs through phony tax preparation services or data breaches, with malware downloaded to the victim’s device without their knowledge.
3. Email Phishing Scams: Individuals receive emails appearing to be from the IRS, prompting them to click on links leading to fake websites resembling the official IRS site. Scammers hope victims will input personal information on the fake site or call a provided fake number.
4. Shady Tax Preparers: Con artists establish temporary tax preparation services, promising swift and substantial returns. These fraudulent preparers aim to misuse personal information for financial gain. Ghost preparers, in particular, refrain from signing the tax returns they prepare, and when e-filing, they refuse to digitally sign as the paid preparer.

To safeguard against tax scams, BBB recommends the following precautions:

1. File Early: Filing taxes as early as possible reduces the risk of falling prey to scams.
2. Check Tax Preparers on BBB.org: Before engaging with a tax preparer, individuals should check their credentials on BBB.org to ensure legitimacy.
3. Verify IRS Website: Always access the official IRS website at IRS.gov to confirm the authenticity of communications.
4. Promptly Contact the IRS: If an individual receives a written notice from the IRS about a duplicate tax return, it is crucial to contact the IRS immediately.

Always visit BBB.org, before doing business with a company. Always report suspected fraud to the BBB by filing a complaint using BBB.org/Scamtracker. Also, file a complaint with the Federal Trade Commission (FTC) at reportfraud.ftc.gov or call 877-FTC-Help. Visit IRS.gov for all your tax needs.