It's tax season, one of the leading times for scammers to find ways to separate you from you money. Don't become a victim.
The South Carolina Department of Consumer Affairs is urging consumers to guard against tax-time identity theft. The agency advises:
• File early. File as early as possible. Identity thieves use consumer information to file tax returns and steal refunds before the individual files.
• Watch out for IRS imposter scams. Fraudsters often pose as the IRS to scare and trick you into disclosing personal information or sending them money. The IRS will not call about taxes without sending a notice through the mail first. Report IRS imposter scams to the Treasury Department.
• E-file in safety. When filing online, use anti-virus software and ensure the computer is connected to a secure internet connection. Do not use public Wi-Fi. There are several websites that allow taxpayers to prepare and file their taxes for free, such as the IRS Free File program.
• Use a legitimate tax preparer. Tax preparers handle a lot of sensitive personal information. Consumers should make sure their preparer is reputable, licensed and has a Preparer Tax Identification Number from the IRS. Visit www.irs.gov or call 800-906-9887 to see if you qualify for free tax prep services provided by IRS-certified volunteers.
Regarding tax preparers, the IRS issued a warning toward the end of the second week of this tax season urging taxpayers to avoid ghost preparers.
By law and as also noted by SCDCA, anyone who is paid to prepare or assist in preparing federal tax returns must have a valid 2019 Preparer Tax Identification Number, or PTIN. Paid preparers must sign the return and include their PTIN.
"Ghost" preparers do not sign the return. Instead, they print the return and tell the taxpayer to sign and mail it to the IRS. Or, for e-filed returns, they prepare but refuse to digitally sign it as the paid preparer.
According to the IRS, similar to other tax-preparation schemes, dishonest and unscrupulous ghost tax return preparers look to make a fast buck by promising a big refund or charging fees based on a percentage of the refund. These scammers hurt honest taxpayers who are simply trying to do the right thing and file a legitimate tax return.
Ghost tax return preparers may also:
• Require payment in cash only and not provide a receipt.
• Invent income to erroneously qualify their clients for tax credits or claim fake deductions to boost their refunds.
• Direct refunds into their own bank account rather than the taxpayer’s account.
The IRS urges taxpayers to review their tax return carefully before signing and ask questions if something is not clear. And for any direct-deposit refund, taxpayers should make sure both the routing and bank account number on the completed tax return are correct.
During tax season and at all times, a basic rule applies: If you’re contacted out of the blue, be suspicious and never respond to an unsolicited call. As noted, the IRS will not call you without prior notice. Don’t assume a caller is genuine because he or she has information about you such as your account details.
Never give out personal information when answering an incoming call, and if you’re not convinced the call is genuine, hang up and call back using the official phone number of the organization calling from their website or any paperwork you have, such as statements.
Scam reporting is an important step in helping empower consumers to recognize and avoid scams.
Consumers believing they are the victim of a security breach, scam or identity theft are encouraged to seek guidance from SCDCA’s Identity Theft Unit. Call 844- TELL DCA (835-5322) or fill out an ID Theft Intake form by visiting www.consumer.sc.gov and clicking on Report Identity Theft.