Although scams can happen any time of the year, they tend to be more prevalent during tax season. Scammers use tax refund time to target victims through various email phishing attempts, fraud schemes, phony phone calls and other deceptive activities. Here are four common tax season scams:
One of the biggest nightmares to straighten out is someone stealing your name and social security number and filing a fake tax return with that information. It can take up to a year to straighten out the mess and your refund is held until it is done. But, a very simple added precaution can stop those thieves dead in their tracks. It is called an IP Pin. If that pin number is not on your return, (you get a new one each January) then the IRS will not accept your return electronically. Period. So they can steal my name/SS# and try to file a return to get tha
During the 2024 tax season, a series of tax scams and inaccurate social media advice led thousands of taxpayers to file inflated refund claims.
These scams centered around the Fuel Tax Credit, the Sick and Family Leave Credit and household employment taxes. The IRS has seen thousands of dubious claims come in where it appears taxpayers are claiming credits for which they are not eligible, leading to refunds being delayed and the need for taxpayers to show they have legitimate documentation to support these claims.
Unfortunately, there are fraudulent tax return preparers out there who are lying to their clients about claiming clean energy credits under the Inflation Reduction Act (IRA). This 2022 law was part of the federal government’s billion-dollar initiative to address bogus climate and energy challenges. It allows any company in any industry to buy tax credits from developers of wind, solar, and other clean energy projects and lower their tax bill by the use of tax credits.