Tax season is upon us again, and scams are always a concern. If you fall victim to a tax scam, you may find yourself losing money or even putting your identity at risk. To avoid tax scams, consider these four factors.
- IRS representatives identify themselves.
Some scammers may come to your home or business and try to pose as IRS representatives. However, if an individual is actually a representative of the IRS, he or she will offer two different forms of credentials: an HSPD-12 card and a pocket commission. If someone says he or she is an IRS representative but cannot supply these credentials, you should suspect a scam. Until you have verified that the individual actually works for the IRS, do not give him or her any sensitive information, and don't make any payments.
- The IRS will not call you to demand immediate payment.
One of the most common scams involves calling taxpayers directly and trying to strong-arm them into making a "tax" payment over the phone. However, the IRS does not operate in this way. If you owe unpaid taxes, the IRS will send you a written bill first. They will not call you and ask for credit card payments, debit card payments or wire transfers. Always wait until you have seen a written tax bill before making any tax payments.
- The IRS won't threaten you.
Another common tactic used by scammers involves trying to get the taxpayer to make a payment using threats. The scammer may threaten to revoke the individual's immigration status, take his or her driver's license or even have the individual arrested. However, the IRS will not make these threats. If someone has called you or come to your home to threaten you, you are probably the victim of a scam.
- You always have the right to an appeal.
Many taxpayers fall victim to scams because the scammer makes them believe they must pay an outstanding balance immediately to avoid serious consequences. However, when dealing with the IRS, you always have the right to appeal your tax bill before you are required to pay it. When someone tells you that you need to make a payment immediately, you should always view it as a red flag.
During tax season, scammers prey on taxpayers by trying to incite fear and force them to make payments they don't owe or provide information they shouldn't give. However, when you know your rights and you know how to identify a true representative of the IRS, you won't fall victim to these scams.
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