Tax season is always high-stress but this season is particularly so, with many early-filing Americans staring at far lower returns than they expected. But this tax season is also stressful for another reason: the influx of scammers. According to the IRS, tax phishing scams, during which people act as though they are with the IRS to gain personal information from you, were up 60 percent in 2018; the numbers in 2019 might be greater, and we have the government shutdown to blame.
“The longest government shutdown in history has put extreme financial stress on hundreds of thousands of taxpayers,” says Max Eddy, a security analyst for PC Mag. “Scammers will exploit major events in the news, and the shutdown combined with 2018 tax season is perfect for their purposes.”
Scammers, says Eddy, will pretend to be government agents, loan collectors — anyone they think will get your attention. These scammers, often known as “ghost preparers,” will accept payment for preparing and filing tax returns, and then never sign the return, either electronically or on paper. Instead, they’ll sneak away with stolen information.
Vigilance is more necessary than ever. “Getting money in the form of a tax return is a strong motivator. The fear of losing money from an audit or tax error is equally powerful,” says Eddy. “During all this madness, try to keep your head about you — especially if you’ve been hit hard by the government shutdown.”
To prevent scammers from sneaking in, here are some tips on how to spot ghost preparers and what to do in order to keep your money where it belongs.
Do Your Homework
Studying up makes it easier to spot a potential scammer before they can file for a dime. “Beware of a tax preparer who charges extensive fees and has suspicious availability times. They must be available even after you file your return,” says Manisha Hansraj, a Tax Expert and Marketing Associate with Rapid Filing Services. “Luckily, the IRS provides a page called the Authorized IRS E-file Providers which will let you find valid companies. You will need to enter the company’s zip code, state and Provider Type. This will list authorized e-file companies and their locations.”
Be Wary of Suspicious Links
Keep an eye out for unsolicited emails or those with links or attachments, as all are red flags and probably originate from scammers. If you receive an email that looks suspicious, look for spelling errors in the message or URLs that don’t look authentic. And, while it sounds obvious, don’t give out personal information of any kind until you’re sure that the person you’re in contact with is on the levels.
“Remember that it’s always acceptable to go straight to the source,” Eddy says. “If you receive a suspicious email or phone call claiming to be from a government agency, bank, or bill collector, look up the organization’s contact information and reach out to them directly. That way, you can be fairly confident they are who they claim to be.”
Make Sure Your Preparer Has a PTIN
A PTIN is a Preparer Tax Identification Number, and, by law, anyone who prepares or assists in the preparation of federal tax returns has to have one. “If you come across a tax preparer who refuses to give you his or her PTIN or claims that he or she does not need one,” says Justin Lavelle, Chief Communications Director of BeenVerified.com, “chances are the person is a fake.”
Don’t Let Your Preparer Demand a Percentage of Your Return.
If your preparer asks for a cut of your return or their fees fluctuate based on the size of your return, back away. This is a scam that gives ghost preparers the incentive to mark down false information, promising you a larger return and, of course, a larger paycheck. “Always ask a tax preparer about payment options before you agree to let him or her do your taxes,” Lavelle says.
If you wait to file your taxes at the last minute, it can open the door for scammers to file for you using whatever personal identifiable information they may have gathered. If you file early, even if someone has obtained your information, they won’t be able to profit from it because the IRS will have already processed your return.
According to Sean Mesier, a Credit Industry Analyst for Credit Card Insider, most tax-season scammers will prey on victims who wait to file their taxes, so they can file falsified forms first,” “Knock your taxes out as soon as possible to get a leg up on those who’d use your information for nefarious purposes,” he advises.