Top 10 Ways to Spot a Tax Scam
Tax season can be stressful enough without having to worry about falling victim to tax scams. With cybercrime and identity theft becoming increasingly prevalent as more people file their taxes online, it's wise to be vigilant and aware of potential scams targeting your personal information (and your financial well-being!)
Here are the top 10 ways to spot a tax scam and protect yourself from becoming a victim:
File Early: Beat scammers to the punch by filing your taxes as early as possible. This reduces the window of opportunity for fraudsters to file a false return in your name. Plus, you’ll probably get your tax refund faster!
Sign Up for an IP PIN: The IRS offers an Identity Protection Personal Identification Number (IP PIN) program, providing an extra layer of security by requiring a unique code for tax filing. Consider enrolling to safeguard your tax return every year.
Beware of Unsolicited Contact: The IRS never initiates contact via email, text, or social media to request personal information. Be wary of any communication claiming to be from the IRS and asking for sensitive data. The agency only sends initial correspondence via the United States Postal Service (USPS).
Verify Caller Identity: If you receive a phone call purportedly from the IRS, verify the caller's identity. The IRS does not ask for credit or debit card numbers over the phone and will never demand payment via gift cards or cryptocurrency. Furthermore, legitimate IRS agents will identify themselves with their employee ID number as a matter of course.
Watch for Spoofed Numbers: Scammers may use spoofing technology to make it appear as though they're calling from an official IRS number. Don't be fooled by the caller ID; always exercise caution when sharing personal information over the phone.
Know the Payment Process: The IRS only accepts payments in U.S. dollars and will never insist on unconventional payment methods like gift cards or cryptocurrency. If a payment request seems suspicious, verify it directly with the IRS.
Stay Informed: Educate yourself about common tax scams and stay updated on the latest tactics used by fraudsters. Awareness is key to avoiding falling victim to fraudulent schemes. Popular scams can change from one tax season to the next, so do your research annually.
Trust Your Instincts: If something feels off or too good to be true, it probably is. Trust your instincts and err on the side of caution when dealing with unfamiliar or suspicious requests for personal information.
Seek Professional Advice: If you're unsure about the legitimacy of a communication or suspect you may be targeted by a tax scam, seek advice from reputable sources such as the Identity Theft Resource Center or the Federal Trade Commission.
Report Suspected Scams: If you believe you've been targeted by a tax scam or have fallen victim to identity theft, report it immediately to the appropriate authorities. Prompt reporting can help mitigate the impact of fraud and aid in recovery efforts.
Protecting Yourself Further
Speaking to NBC News, Colleen Tressler, a senior project manager at the FTC’s Division of Consumer and Business Education, shared the importance of taking swift action if you suspect you've been targeted by a tax scam. Tressler said, "It’s much easier to stop tax ID theft before it happens than to recover from it."
Utilize resources like identitytheft.gov to report incidents of identity theft and access guidance on protecting yourself from various types of fraud. Remember, staying informed and proactive is key to safeguarding your financial well-being during tax season and beyond.
Tax season doesn't have to be synonymous with anxiety and uncertainty. By staying informed, vigilant, and proactive, you can spot potential tax scams and protect yourself from falling victim to identity theft and financial fraud. Remember, just like with your physical health, prevention is always better than cure when it comes to safeguarding your personal information and financial welfare.
Stay safe and secure this tax season – and every tax season!
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Our Team
At IAM Accounting LLC, we take pride in our diverse and experienced team of professionals, each dedicated to providing exceptional service in accounting, tax planning, payroll, and financial management. Our team members bring a wealth of knowledge from various financial backgrounds, working together to ensure that every client receives the personalized attention and expertise they deserve. From managing complex accounting operations to providing tax-saving strategies, we’re here to help you achieve your financial goals with precision and care.
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Ibrahim Mohammed
Founder & Tax StrategistIbrahim leads IAM Accounting LLC, offering expert tax strategies and financial guidance to help clients reduce tax liabilities and achieve their financial goals.
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Jasleen Daswal
ControllerJasleen is a highly skilled Controller with over five years of experience as a Chartered Accountant. She ensures accurate financial management and oversees accounting operations.
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Sahil Shaikh
Chartered Accountant & Tax PreparerSahil is a Chartered Accountant and tax preparer with expertise in tax compliance, financial reporting, and strategic tax planning, helping clients optimize their financial outcomes.
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Ankit Gupta
Accounts AssociateAnkit brings a wealth of experience in finance and accounting, providing key support in day-to-day financial operations to ensure accuracy and compliance.
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Neha Sharma
Key Accounts ManagerNeha manages our most valued client relationships, with over four years of experience as a Chartered Accountant, ensuring that client needs are met efficiently and professionally.
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Michael Holsinger
Payroll Representative, ADP PartnerMichael is our dedicated payroll expert and ADP partner, managing payroll processes with precision and helping clients navigate payroll services seamlessly.