Scammers are always looking for a way to exploit and take advantage of people—and one common way is through the promise of a huge tax return. It can be incredibly enticing to bite at the chance to get a huge tax return when you aren’t initially expecting one. However, many of these are nothing more than empty promises in order to scam you out of your hard-earned money. Often times, these organizations will go as far as to target individuals that have already filed, claiming that they can help them get tax cuts that they wouldn’t normally qualify for. Falsely reporting refund claims by yourself, or through a scammer, could mean losing your return or facing penalties and charges from the IRS.
Signs to Look for
Legitimate tax businesses and organizations won’t target you the same way IRS refund scams will. Here are some signs to look for if you think you’re being targeted by refund fraud organizations:
- Direct solicitation: Credible tax businesses won’t cold call or show up at your door. The reason the IRS tax refund scammers take this approach is that they often don’t have a commercial facing, or the one they do have is merely a front.
- Word of mouth and flyers: You can expect bogus flyers and members of community organizations to spread the word about their “savings”.
- Earned income tax credit: The most common approach scammers take is the EITC. While it is a legitimate tax credit, scammers will abuse it to profit off your taxes.
- Filing in your name: In order for scammers to take full advantage you, they will need your permission to file in your name.
Many otherwise honest taxpayers lose their benefits from Social Security and low-income housing because of tax refund scams. Scammers will make inflated claims on your tax returns and then turn around and take a considerable portion of your return as a fee. Methods to get away with this include by giving fake IRS return documents or denying their clients the documents altogether. If you’re working with a tax business that refuses to give you a copy of the return they filed, you should contact a lawyer or the police immediately.
What to do if you’ve been the Victim of Tax Refund Fraud
One of the many reasons IRS refund scams tend to target low-income families and individuals is because they know they won’t be able to afford an attorney to get their money back. However, you can still get help recovering your losses with the assistance of the right tax professional. Even if you can’t get the funds together to sue the fake tax business that took advantage of you, there is still a good chance that you may be able to recoup your lost federal benefits. If you’ve been the target of an IRS tax refund scam, you should contact a professional as soon as possible.
Being the victim of refund fraud is a devastating experience; not only have you just paid a huge portion of your return to a con artist, but you may also have to pay penalties for filing a false claim and getting a fraudulent refund. Because the taxpayer is legally responsible for the information reported on their tax return, you can quickly find yourself in serious debt with the IRS after being denied your tax refund.
How to Avoid Being a Victim
When something sounds too good to be true, it usually is. Don’t become a statistic; in 2017, 15 million consumers experienced identity theft.
If a business is claiming they can save you tens of thousands of dollars on your tax refund with credits that you’ve never heard of, chances are it’s a scam.
If you aren’t certain, the IRS has a list of tips and other resources to help taxpayers select a qualified tax professional.
One way in which you can vet a tax preparation business is by asking for their credentials. The IRS doesn’t let just anyone handle people’s taxes for them; tax preparer information and qualifications can be found on the IRS website if the organization has been credentialed. You can search a tax preparer’s ID number on the IRS’s website so you can determine whether or not you’re dealing with a qualified business or individual.
If you’ve been the target of an IRS refund scam, Community Tax has the resources and professionals to get you through this difficult and trying time. Our qualified CPAs, tax attorneys, and tax professionals have helped countless people overcome a variety tax-related issues. Don’t hesitate—our honest and reliable professionals are standing by to assist you with whatever you need.