During Tax Identity Theft Awareness Week and throughout this tax season, Attorney General Chris Carr is encouraging consumers to protect themselves from tax-related scams. Here’s what consumers need to know:
IRS Impersonation Scams
In this type of scam, a fraudster contacts consumers by phone, claiming to be an IRS agent and insisting that the consumer owes the IRS money. The caller asks the consumer to pay by wiring money or loading money onto a pre-paid debit card and often threatens arrest or legal action if the consumer does not comply. Consumers can easily be convinced that these calls are real as the scammer may know a consumer’s full or partial Social Security number (SSN) or even use spoofing software that causes the IRS name and/or number to show up in your caller ID.
Here is what you need to know to avoid this scam:
- The IRS will never call a consumer about unpaid taxes or penalties – the agency typically contacts consumers by letter via the U.S. Mail.
- They won’t leave a message threatening to sue you, arrest you or deport you if you don’t pay right away.
- The IRS won’t demand a specific form of payment, such as an iTunes gift card, Green Dot Money Pak or wire transfer.
- If you get a call purporting to be from the IRS, never send money. Instead, hang up and either a) report the scam to the FTC and to the Treasury Inspector General for Tax Administration at tigta.gov or by calling 1-800-366-4484; or b) If you know you owe taxes or you think you might owe taxes, call the IRS at 1-800-829-1040. The IRS employees at that line can help you with a payment issue – if there really is such an issue.
- If you get an email that claims to be from the IRS, do not reply or click on any links. Instead, forward it to firstname.lastname@example.org.
Tax Identity Theft
This occurs when a fraudster uses your Social Security number (SSN) to file a tax return in your name and collect your refund. It also occurs when someone uses your SSN to get a job. Typically, consumers don’t realize they have been victims of tax identity theft until they get a written notice from the IRS saying that more than one tax return was filed using their SSN. If someone used your SSN to get a job, and the employer reports that person’s income to the IRS using your SSN, the IRS will send you a notice saying you received wages but didn’t report them.
The best way to avoid tax identity theft is to file your taxes as early as possible before a scammer has the chance to use your Social Security number to file a fraudulent return.
As added security, Georgia consumers can get an Identity Protection PIN (IP PIN) from the IRS before they file their returns. This is a six-digit number, which, in addition to your Social Security number, verifies your identity. It is important to note that you cannot opt-out once you get an IP PIN. Once you apply for it, you must provide the IP Pin every time you file your federal tax returns – this year and in all future years. The IRS will provide your IP PIN online. A new IP PIN is generated for each filing season and can be retrieved starting in mid-January of each year by logging into the account you create. Visit www.irs.gov/individuals/get-an-identity-protection-pinfor more information about the program.
If you are the victim of tax identity theft, contact the IRS at 1-800-908-4490. You should also file a complaint with the FTC at www.ftc.gov/complaint or by calling 1-877-FTC-HELP.
Some tax preparers offer Refund Advances, which are essentially short-term loans in the amount of your expected tax return less the tax preparation cost. While these loan products can get you the money right away, you should consider whether receiving your refund a couple of weeks sooner is worth the cost of the tax preparation service. You should also be aware that some tax preparers may imply that you are assured of receiving a loan advance, only to inform you – after you’ve paid an up-front fee and your return has been submitted – that your loan was denied. If that happens, you’ll have to wait for your tax refund after all, and you will have paid a lot of money for tax preparation services that you could have done yourself, often at no cost. To avoid that scenario, be very wary of promises such as “most loans approved.” If it doesn’t say your refund advance is guaranteed, then it isn’t.
Why Not File for Free?
Many taxpayers are eligible for free tax preparation and e-filing through the IRS’ Free File program or Volunteer Income Tax Assistance (VITA). To find a VITA office near you, go to:https://irs.treasury.gov/freetaxprep/.
The IRS has partnerships with tax preparers and software companies that offer free online preparation and e-filing of your tax returns to individuals and families with adjusted gross incomes of $66,000 or less. To learn more, visit www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free.
If your adjusted gross income is more than $66,000, you can use free fillable forms via the IRS website (for federal return only); however, you need to know how to do your taxes yourself and have access to your 2017 tax return.
The Volunteer Income Tax Assistance (VITA) program offers free basic income tax preparation to those earning $54,000 or less, people with disabilities, the elderly and those with limited English-speaking ability. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are aged 60 years or more. They specialize in questions about retirement-related issues unique to seniors. To find a VITA or TCE site in your area, go toirs.treasury.gov/freetaxprep.
The IRS issues most refunds in 21 days or less from the time the tax return is received.
Information direct from the Georgia Attorney General’s Office.