Karyn Vaughn, E.A.
Special to Valley News
As tax season gets underway, tax-related scams intensify. There are many of these scams circulating. Be aware of the common ones so as not to fall prey. Remember knowledge is power. Below are common scams the IRS is warning taxpayers to avoid.
IRS released an urgent warning about a new W-2 phishing scam aimed at employers. Cybercriminals spoof a company executive’s email. Using that email address, they send a request to payroll or human resources contacts requesting copies of the company’s W-2s. Not only should you be wary of this type of scam, but you should never email W-2 forms in any case because they are so sensitive. W-2s contain all the information necessary to steal one’s identity, including full name, address, Social Security number, income and employer.
In addition to using spoofed emails from known persons to request W-2s, cybercriminals have also used this method to request wire transferred funds. Because the recipient believes the email to be from their own company executive, this ploy also works. These emails may also come to a person from a trusted friend’s email address. Be sure to get inperson confirmation before following instructions for funds transfer from an email source.
The one I hear reported most often by my own clients are phone scams. A caller claims to be an IRS agent and demands immediate cash payment for taxes. They direct the victim to bring cash or wire transfer money to a certain place. These callers can be aggressive and convincing. They threaten the taxpayer with arrest or offer to accept a reduced settlement amount if they pay immediately. If you receive such a call, hang up. You can call the IRS directly at (800) 829-1040 to verify that you have no outstanding tax issues.
There are many unscrupulous groups preying on generous people. Some claim to represent a charity that has a name similar to legitimate charities. I had a client who had donated his car to one such “charity.” When we tried to track down the federal identification number for his tax deduction, we discovered it was a fraud. Www.IRS.gov has tools to look up the status of charitable organizations; check them out before donating.
Duly licensed tax preparers are by-and-large people of integrity. However, taking advantage of the public’s trust of our profession are some criminals posing as tax preparers to perpetrate identity theft. Check the IRS preparer directory to be sure your professional is in good standing at www.irs.treasury.gov/rpo. Even some licensed preparers have committed other types of fraud, such as having client refunds deposited into the preparer’s bank account. If you prepare your own taxes online, be sure to check thoroughly the legitimacy of sites, especially for sites that do taxes for free and tech support links. These websites are sometimes covers for phishing scams. The exception is IRS Free File at www.irs.gov/freefile.
Although technology has improved our lives in many ways, vulnerability to cybercrime and identity theft is sometimes the price. Tax time is open season for these criminals. Arm yourself with the power of knowledge and do not fall victim.
Karyn Vaughn is an Enrolled Agent and business consultant. She has been helping taxpayers for 30 years. She has extensive experience in tax matters for individuals, corporations, partnerships, LLCs, trusts, estates and IRS settlements. Her status as an E.A. allows her to practice in all 50 states and to represent taxpayers before the IRS.
If you have tax questions that you would like to see covered in this column, please submit them by email to karyn@karynvaughn.com or visit her website at www.karynvaughn.com.
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