While criminals target taxpayers throughout the year, their schemes are most prevalent during the actual tax season when rush to file is high and the risk of getting swindled is even higher. In fact, more than half of the tax scams reported to the BetterBusiness Bureau (BBB) are uncovered between January and April.
The ALG Group is committed to keeping our customers informed and aware of how to know when they’ve been scammed and the best strategy to get out of trouble. We also offer tips on preventative measures to avoid being scammed in the first place. Let’s take a look below.
There are ways to spot tax scams before becoming a victim, but thieves are becoming more calculating with each passing year and sometimes don’t even need to directly lure you into giving up sensitive data. In the event that it does happen, it’s important to know how to recognize it so you can proceed with proper damage control. You could be the victim of a tax scam if you experience any of the following:
This could mean that someone has already filed a fraudulent return using your Social Security Number (SSN) in order to reap the return for themselves. If this happens, you should contact the IRS immediately to request a copy of the return by filling out Form 4506-F with the following information:
Documents demonstrating your authority to obtain the requested tax return (such as Form 2848, Form 8821, or a court order) must also be included with Form 4506-F. If you’re a parent or legal guardian requesting return information of your minor child or can provide a CAF number, you don’t need to include documentation.
The IRS will generally acknowledge your request within 30 days of receiving it and will release the fraudulent return to you or follow-up within 90 days.
NOTE ABOUT REJECTED E-FILE RETURNS
If you e-filed your tax return and it was rejected, you’ll need to fill out Form 14039 (Identity Theft Affidavit) first before the IRS will release the fraudulent return to you.
If the letter asks you to confirm if you’ve sent a return using your name and SSN, it could mean that someone either attempted to or has filed using your information and the activity seemed suspicious to the IRS.
Don’t ignore the letter and call the number provided immediately. The tax professionals at The ALG Group are also more than happy to approach the IRS on your behalf and work to get the situation resolved.
This could mean that someone has access to your SSN and has used it to gain employment. If this happens, take the following steps:
The IRS doesn’t give out freebies. If you receive a refund for a tax return you didn’t file, it could mean that a scammer has Social Security Number or Individual Taxpayer Identification Number and bank account information. They might then call you posing as the IRS and instruct you to send the money back by wire transfer or another means. Either way, you can guess where it's actually going.
The IRS will NEVER demand payment through a specific method nor initiate contact with you by phone. If you get a call like this, we recommend that you get in touch with your bank as well as the IRS immediately.
This document shows most of the line items from the tax return that you originally filed. If you received one in the mail but didn’t request it, this could mean that your Social Security Number has been compromised and should contact the IRS immediately.
Identity thieves only need your full name, SSN and birthdate to file a fake tax return. In this digital age where much of our sensitive personal information is stored electronically, it isn’t terribly hard for them to get ahold of all three.
Since the IRS only allows for one tax return to be filed for a single SSN per year, the best strategy is to beat the scammers to the punch and file as early as possible before they even have a chance to scoop up your info floating around in cyberspace. We at The ALG Group keep you updated on when tax filing season opens and give you the opportunity to schedule an appointment ahead of time so you’re ready to go from the start.
These nine little digits can do a lot of damage when in the wrong hands. Leave any documentation that contains your Social Security Number (SSN) at home, ideally in a safe and secure place to which only you have access. If you store personal information electronically such as on a computer or smart device, consider encryption software or using two-factor authentication to protect it.
If you’re filing electronically, don’t use a public WiFi network such as at a coffee shop or library to submit your tax documents. These types of connections are unsecured and identity thieves can easily download the necessary data they need to further their schemes with the push of a button and simple network scanner software.
If you’re filing a paper return, take it directly to the post office and mail it yourself. Don’t leave it in your personal mailbox as thieves have been known to prowl neighborhoods around tax time on the hunt for sensitive documents left for pick up.
Most financial institutions employ highly advanced cybersecurity measures to make sure that the personal data they handle stays out of the hands of criminals. However, there are unfortunately some occasions when they’re able to break through and access it.
If your bank, credit agency or lender issues a notice that a data breach has occurred in their system, take the proper steps to protect yourself including changing passwords and monitoring credit reports and accounts for any suspicious activity.
Most professional tax preparers like The ALG Group provide honest, high-quality service. However, there are a number of fraudulent ones that pop up every season to serve only themselves by manipulating returns and talking you into doing illegal things that you aren’t aware are against the law. A legitimate tax professional will never do any of the following:
New for the 2021 tax season, theIRS has extended eligibility for the Identity Protection PIN Opt-In Program to all taxpayers. This voluntary program provides an additional line of defense to help prevent tax-related identity theft by way of a unique code that is issued to you every tax season. Before submitting your tax return, this code is used as an absolute form of verification to complete the process.
Since only one tax return may be submitted per taxpayer each year, those who have not filed yet are prime targets for scammers. All of the vulnerable personal information used to submit your tax return - including your name, address, and Social Security Number - is linked to an Identity Protection PIN. This means that even if the aforementioned information is compromised before you have a chance to file, an identity thief would be unable to use it to file a fraudulent return without the unique code that was issued to you for the current tax year.
To get an Identity Protection PIN for the 2021 tax season, the IRS advises using their Get An IP PIN tool available on their website. You are not required to file a Form14039 (Identity Theft Affidavit) in order to join the program - it is available to all taxpayers.
The tool uses Secure Access authorization in order to verify your identity. Before using the tool, we recommend reviewing the IRS Secure Access Requirements to prepare the information you’ll need to complete the process.
If your adjusted gross income is $72,000 or less, you may complete Form 15227 (Application for Identity Protection Personal Identification Number) and mail or fax it to the IRS. A representative will contact you and verify your identity over the phone. Make sure to have your tax return from the prior year in order to complete the process.
If you are unable verify your identity by phone, you must contact the IRS directly and make an appointment at a Taxpayer Assistance Center to complete the process in person. You’ll need to bring along two forms of identification, including one government-issued picture ID.
If you verified your identity online, your Identity Protection PIN will be given to you immediately. If you verified by phone, you will receive your Identity Protection PIN by mail in about three (3) weeks.
If filing electronically, you or your tax professional will be prompted to input your Identity Protection PIN before submitting your return. If filing by mail, the code must be written near the signature line of your paper return.
No. Once you have signed up for the program, a new Identity Protection PIN will be given to you each year.
If you suspect that you’ve been the victim of a tax scam or have a specific question about how to secure your information, please feel free to give The ALG Group a call at (855)648-2943. We can help you make the most informed decisions possible about resolving tax-related identity theft issues, and develop strategies to protect yourself going forward.