2020 tax scams are already underway. Here’s what you need to know to stay safe in the new year
The 2019 tax year just ended, which means scammers are now working harder to sink their claws into the unsuspecting and gullible in 2020.
These con artists rely on fear and disinformation to steal money and identities. But knowing scammers’ modus operandi can help you protect yourself and your personal information. Here are four of the 2020 tax season scams already underway, even though the new year has just begun.
The Canceled Social Security Number
One scam that’s been making the rounds is a scare campaign using robocalls claiming that law enforcement is going to suspend or cancel the call recipient’s Social Security number (SSN) in response to taxes owed. While it’s a blatant scam, it often tricks people into calling these numbers back.
Remember, this is 100% a scam. According to the Federal Trade Commission (FTC), a person’s Social Security number will never get suspended. Plus, the IRS only contacts taxpayers through snail mail or in-person.
Unfortunately, some people still fall for scams. In the first nine months of 2019, the FTC received more than 139,000 reports of this deception. One woman lost nearly $340,000 after the caller told her someone stole her SSN and committed crimes under her name. He then persuaded her to transfer assets to accounts he controlled.
The IRS Impersonation Email
Another tax scam making the rounds is one that involves emails and IRS impersonators. You might receive a message that claims to be from the IRS, either reminding you to file your taxes or offering you information about your refund. These spoofed sites collect any information you input, facilitating identity theft. They can also infect your computer with malware, allowing fraudsters to steal more data.
Remember, the IRS does not send unsolicited emails or engage through text messaging or social media. Plus, they will never ask you for personal information, such as your SSN, PINs or passwords.
The Bureau of Tax Enforcement
Many people are aware of tax scams and know the IRS doesn’t ask for money over phone or email. As a result, scammers are sending out letters. This mail will claim to be from the Bureau of Tax Enforcement and may mention the IRS, demanding immediate payment. While these letters look legit, the Bureau of Tax Enforcement does not exist.
While you shouldn’t ignore mail from the IRS, be sure it’s real. Official letters will always have a seal and a letter or notice number. You can also call the IRS directly to verify the information. Remember, if you decide to call, don’t call the number on the fake letter, as it could connect you to the fraudster. Instead, look up the number online.
The Ghost Tax Preparers
Taxes are complicated, which is why so many people rely on the skills of a preparer or CPA. However, it’s vital to be aware of scammers posing as professionals. These ghost preparers will take money to complete your taxes but won’t sign the return, making it look like you did the work yourself. Cons like this tend to target the elderly, costing an estimated $2.9 billion annually in financial losses.
Ghost preparers often lie on the return to make you qualify for credits you haven’t earned or apply changes that will get you in trouble. Since they don’t sign, you’ll be responsible for any errors. At best, you’ll have to repay the money owed. At worst, you could be looking at an audit.
Protect yourself from fraudsters by ensuring your tax preparer has a valid preparer tax identification number (PTIN). These numbers are issued by the IRS and get updated each year. Plus, be sure the preparer signs your return before submission.
Be Vigilant About 2020 Tax Scams
Tax scams are a year-round business for fraudsters. Nevertheless, they’ll become more prevalent in the new year, when people start filing their 2019 returns. If you’re planning to file your taxes soon, follow the advice above to stay safe.
To keep your personal information and finances secure against 2020 tax season scams, be vigilant and double-check everything.