Tax season is here. Time to gather all your important documents and find the best way to file your income taxes. Whether you’re doing your own taxes or hiring a tax preparer, consumers need to take steps to avoid tax scams and fraud.
Remember, you are legally responsible for what is on your tax return even if it is prepared by someone else.
If your income is less than $60,000, you might be eligible for free, reliable tax preparation services through the VITA program. Before you pay for a possibly dishonest, costly, or fraudulent tax preparer, go to FreeTaxPrepLA.com to see if you can receive free tax preparation services near you, or file for free online.
Here are a few of the most common tax scams, according to the IRS.
Stimulus Payment & Unemployment Benefits Scams: With another round of stimulus payments possibly coming soon, taxpayers should beware of scammers trying to take your payment away from you – never give out your personal information. Most taxpayers will receive their payment automatically as a direct deposit. With many Americans losing their main source of income this past year, unemployment benefits have been critical – but scammers are ready to take advantage of the situation too. Make sure to report the income you received from unemployment benefits and review these tips from the IRS to report fraud. Contact the IRS for more information.
Phishing: Watch out for fake emails or websites looking to steal your personal information. The IRS will never initiate contact with you by email about a bill or tax refund. Don’t click on emails claiming to be from the IRS.
Phone Scams: In recent years, consumers have received phone calls from criminals impersonating IRS agents and threatening people with arrest or deportation. These are scams. Never give out your personal information or send money if you receive these calls.
Identity Theft: Watch out for scammers trying to steal your identity, not just during the tax filing season, but all year long. If you normally receive a tax refund, scammers might try to file a false refund and steal your hard-earned money. Protect your personal information, especially your Social Security number.
Return Preparer Fraud: Make sure not to hire unscrupulous return preparers. While many tax professionals provide honest, high-quality service, some dishonest tax preparers and businesses try to scam clients, overcharge for services, push refund fraud, and other scams.
Inflated Refund Claims: Beware of any person or business that promises inflated or “instant” tax refunds. Those preparers who ask clients to sign a blank return, promise a big refund before looking at taxpayer records or charge fees based on a percentage of the refund are probably up to no good.
If you believe you are a victim of income tax fraud, contact the Department of Consumer and Business Affairs at (800) 593-8222.