GRAND RAPIDS, MI (WKZO AM/FM) – A new year means a new tax season, but it also means new ways to potentially lose money.
The Better Business Bureau Serving Western Michigan (BBB) says the number one scam to watch out for is identity theft.
This happens when a scammer uses your Social Security number and other personal information to file a tax return in your name in order to collect your refund.
Consumers often don’t realize they’re victims until they get a written notice from the IRS saying someone else had already filed a return.
“The easiest way to avoid a tax scam is to file as early as possible, so the scammers don’t have a chance to use your information and file before you do,” President & CEO of the BBB Serving Western Michigan Lisa Frohnapfel said. “It is always important to protect your personal information; however, filing early can help protect your tax return.”
Another popular scam involves people impersonating the IRS.
The scammers call, email or text claiming to be from the IRS, pressuring residents to provide personal information or a payment.
They may claim you owe money and must pay right away by prepaid debit card or wire transfer. If you don’t comply, the scammer threatens you with arrest and fines.
The BBB is now sharing tips on how to avoid falling victim and file safely.
File your taxes as early as possible.
The IRS does not initiate contact with taxpayers by email, text or social media to request personal financial information.
This includes requests for PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts.
If you do owe, the IRS will give you a chance to ask questions or appeal.
The IRS will never demand immediate payment, require a specific form of payment, or ask for credit or debit card numbers over the phone. Pressure to act quickly is a red flag that it is a scam.
Write down your Identity Protection Pin from the IRS before you file your return.
Victims of identity theft and others can be issued a six-digit number that will be used to confirm your identity, along with your Social Security number. But, once you apply for a PIN, you cannot opt-out and must use the pin each year you file your federal tax return. You will receive a new PIN each December by mail. Visit the IRS for more information about the program. Read BBB’s tips about the IRS PIN.
Make sure you are accessing the REAL IRS when filing electronically.
Visit irs.gov, and make sure the lock symbol is in the browser window. This means the website is secure and safe to enter personal sensitive information.
Only deal with trustworthy tax preparation services.
See these tips for finding the right tax preparer for you.
If you are the victim of tax identity theft, contact the IRS at 1-800-908-4490.
You should also file a complaint with the Federal Trade Commission (FTC) at ftc.gov/complaint or by calling 1-877-FTC-HELP. The FTC also offers a personalized identity theft recovery plan at identitytheft.gov.
Readers can visit bbb.org/taxtips for more resources on how to find a qualified accountant or tax preparer near you, and learn more ways to avoid tax scams.
Report any tax scams to bbb.org/scamtracker.
