4 Ways To Reduce Your 2019 Tax Bill
Tax season is in full swing.
Over the coming months, the IRS will receive about 150 million tax returns.
If you haven’t sent yours yet, then I urge you to take a look at my recent report describing hacks you can use to lower your tax bill.
But that’s not what I want to talk to you about today.
You see, the tax collectors won’t be the only ones busy this filling period.
Con artists’ activity drastically increases this time of year.
They know that taxpayers are under pressure to report their taxes correctly, and they’re looking to exploit that.
These scammers are very successful. The IRS reported US$1.8 billion of tax fraud during the last year.
I was shocked to hear that number high, and I want to make sure you are aware of this danger.
Here are some of the most common scams circling around.
Be Careful Who You Talk To
The most common ploy involves a phone call from “the authorities,” such as the IRS, the police, or even the FBI.
Scam artists then threaten anything from arrest to deportation if you don’t wire the “remaining” taxes to the provided bank account.
It’s also common for victims to hand over sensitive information, like credit card details or other personal information, for perpetrators to abuse.
Another method involves phishing.
Here, fraudsters use social media, email, and text messages to contact taxpayers by posing as a legitimate institution.
The trick is to convince you to share personal information or credit card details.
Moreover, these often include a compromised link that, when clicked, installs malware (software that secretly steals your data) on your device.
Scammers also pose as accountants promising unrealistic tax refunds.
That’s a strategy that works well with retirees, low-income individuals, and non-English speakers who might not have a long-standing relationship with a tax advisor.
Even if you’re working with a legitimate accountant or advisor, they could have their data breached and your information stolen.
Almost two dozen tax advisors have reported this happening since the start of the year, so make sure yours has the right security precautions in place.
Here's How To Protect Yourself
Here are a few simple rules to follow to protect yourself from becoming a tax-fraud victim.
First, never give out personal information to strangers over the phone.
Furthermore, beware if the IRS calls you by phone or sends you an email. The agency primarily uses regular mail to contact taxpayers. It would also never call to request credit card details or personal information, threaten repercussions, or discuss unexpected refunds.
You must also take care when an “IRS” message contains suspicious links or attachments. Do not click on those if you’re not sure what’s behind them.
Finally, when working with new tax advisors, do some background checks on them, such as what’s their license status and if they have a history of disciplinary actions. You can get that information on Better Business Bureau’s website, your state’s Board of Accountancy for CPAs, the IRS’ directory for enrolled agents, and your state’s Bar Association for attorneys.
Happy tax season.