Do you know the warning signs of a tax scam?
The IRS scam is more prevalent than ever. As people gather their W-2 and other documents to file their taxes, Better Business Bureau of Upstate New York knows scammers are ready to try and take advantage.
BBB reports the IRS scam is number one for 2015, according to Scam Tracker. Of the first 10,000 reports processed by BBB, 24 percent were the IRS scam. For the Upstate New York service area, it was 19.8 percent.
Here are the two common tax scams to avoid:
Phone calls. People are consistently reporting to BBB that they received calls from “IRS representatives” who claim they owe taxes and must pay or be arrested. At this time, the IRS will never call you, only send you a letter.
Email phishing. The subject “you are to update your IRS e-file immediately” is a scam. If you get one of these messages, do not respond or click on the links. Forward the email to the IRS.
There are other ways you can lose money this tax season:
Say no to refund advances. It could mean high-interest rates and it doesn’t get you your refund faster. Beware of “prepaid” lines of credit, too. If you go for either, you’re giving away some of your refund to a money lender. Do not use a tax preparation services that promises larger refunds than the competition, and avoid tax preparers who base their fee on a percentage of your refund.
If you file your own taxes, use BBB’s checklist:
• E-file only from secure computers (no unsecured WiFi)
• Don’t file taxes from a link in an email
• Mail tax returns from the post office
• Shred old tax returns after 7 years of the filing date.