Beware of Emerging Tax Scams: Protecting Yourself During Tax Season
As tax season approaches, it's crucial to be vigilant against emerging tax scams that can lead to significant financial and legal consequences. Unscrupulous promoters are increasingly exploiting social media platforms to deceive taxpayers into claiming credits and refunds they aren't entitled to, resulting in delayed refunds and potential penalties.
Overstated Withholding Scam
One prevalent scheme involves "Overstated Withholding," where individuals are encouraged to fabricate income and withholding information on tax forms such as Form W-2 or Form 1099. Scammers suggest that by inflating these figures, taxpayers can receive substantial refunds. However, submitting false information is illegal and can trigger IRS scrutiny, leading to frozen refunds and possible criminal charges.
Misuse of Tax Credits
Another common scam pertains to the improper claiming of tax credits, such as the Earned Income Tax Credit (EITC) or the Child Tax Credit (CTC). Promoters may falsely assert that individuals qualify for these credits, regardless of their actual income or family situation. Falling for this scam can result in the IRS disallowing the credit, imposing penalties, and requiring repayment of any received funds.
Phishing and IRS Impersonation
Taxpayers should also be cautious of phishing schemes where scammers impersonate IRS officials through phone calls, emails, or text messages. These fraudsters often threaten legal action or arrest to intimidate individuals into providing personal information or making immediate payments. It's important to remember that the IRS will never initiate contact via these methods to request sensitive information or demand immediate payment.
Protective Measures
To safeguard yourself during tax season:
Verify Information: Always cross-check any tax-related advice or claims with official IRS resources or consult a trusted tax professional.
Be Skeptical of Unsolicited Communications: Do not engage with or provide personal information to unsolicited callers or messages claiming to be from the IRS.
Report Suspicious Activity: If you encounter a potential scam, report it to the IRS and the Federal Trade Commission (FTC) to help protect others.
By staying informed and exercising caution, you can protect yourself from these prevalent tax scams and ensure a smooth tax-filing experience.
Reference: Hansen, T. (2024, December 9). Taxpayers need to beware of these popular scams. Taxpayer Advocate Service.https://www.taxpayeradvocate.irs.gov/ news/tax-tips/taxpayers-need-to-beware-of-these-popular-scams/2024/12/
Comments