As we help our clients prepare to file their taxes for 2019, here are some tips to be safe:
One:
Business-Related Scams: The IRS recently warned us of the rising threat of W-2 scams, where hackers lure payroll and HR professionals to share sensitive tax information via a bogus intercompany email. By the end of the email exchange, your employees’ W-2 Forms could be in the hands of cybercriminals.
In another scam, companies applying for Employer Identification Numbers (EINs) are being tricked into signing up through fraudulent websites. Like your Social Security Number, your EIN is required for business bank, loan, and credit accounts as well as state and federal tax filing. Only apply for your EIN by filing a SS-4 Form through the IRS.
Red flags indicating your business identity has been stolen:
You’re rejected from requesting a tax extension or sending an e-filed return because a return with your company’s EIN is already on file.
Your business receives an unexpected tax transcript receipt or IRS notice that doesn’t correspond to your return.
You fail to receive expected communication from the IRS because fraudsters have changed the address on your application
Phone scams: Truth; anyone who calls or texts you (unsolicited) and claims to be from the IRS is a fraud. The IRS will never call, text or email you out of the blue. It will never ask you to wire cash or provide bank and credit card numbers. If you’re contacted, don’t give out any information about yourself. Just hang up.
Two:
Phishing: We are seeing an uptick in emails and texts to clients which appear to be from IRS, collection agencies and also tax preparation services. The emails are alarming, claiming your return was filed and rejected, or that you owe large sums of cash! They trick you to click on a link and give up personal information (name, Social Security number, bank account numbers, etc.) Don't be fooled by this and do not give your personal information to anyone claiming to have control of your refund or tax payments.
Three:
Identity Theft: Although IRS has put the hammer down on a lot of large- scale identity theft operations, this 2019 season may pose a bigger threat with the advent of e-file opening and government shutdown recovery. We always suggest that you file early. If you become a victim of identity theft, follow IRS instructions, with the help of your tax preparer, as soon as possible.
Four:
Preparer Fraud: There is an easy source to check on your tax preparer via IRS: https://irs.treasury.gov/rpo/rpo.jsf
We want to believe all tax preparers may be honest, but there are some telltale signs that your preparer might be a little too self-motivated:
They base their fee on the size of your refund - no thank you
They don’t insist you give them records and receipts - no way
They ask you to sign a blank return - definitely no!
Five:
Phone scams: Truth; anyone who calls or texts you (unsolicited) and claims to be from the IRS is a fraud. The IRS will never call, text or email you out of the blue. It will never ask you to wire cash or provide bank and credit card numbers. If you’re contacted, don’t give out any information about yourself. Just hang up.
The best way to protect yourself is to be vigilant about not falling for the most prevalent tax scams listed here.
And never give your personal information to untrustworthy sources.