As tax season kicks off, it is essential to prepare for filing your 2024 tax return and to remain vigilant against scammers who are already active. Do not fall victim to their tactics.
Many individuals neglect to safeguard their personal information online, and the need for caution has never been greater, especially in light of extensive data breaches like the one involving National Public Data, which compromised approximately 2.9 billion records, including Social Security numbers.
It is crucial to protect yourself for various reasons, particularly the time and effort required to recover from tax identity theft.
Additionally, financial pressures and stress can lead individuals to make hasty decisions when presented with offers that seem too good to be true. A recent Credit Karma survey revealed that nearly 40% of taxpayers rely on refunds to meet their financial obligations.
Here are some fundamental do’s and don’ts to consider when engaging with tax professionals at Wave Tax, which serve as a solid foundation.
Selecting a Tax Professional Service is Vital
The Internal Revenue Service (IRS) indicates that over half of taxpayers seek assistance from tax professionals when filing their returns. Opting for a reputable provider can help avoid financial pitfalls.
Taxpayers should steer clear of unethical “ghost” return preparers who fail to sign or provide a valid preparer tax identification number (PTIN) on the tax returns they prepare.
Additionally, taxpayers can utilize the IRS Directory of Federal Tax Return Preparers with Select Credentials and Qualifications to locate trustworthy professionals.
Use Secure Online Methods
The transition of our financial and daily activities to the Internet brings about specific risks, particularly during tax season. Here are several strategies consumers can employ to safeguard their identity and personal information.
The initial step is to select a trustworthy tax advisor. When transmitting personal information online, ensure that your provider offers a secure connection, allowing the information to reach the intended recipient safely.
🛑 Warning: If your tax advisor requests that you send personal information via email, it may be advisable to consider a different provider.
You may also read: Attention! Your Tax Return may be Marked for an ’Audit Review’
File Early and Get IRS Pins
Scammers sometimes attempt to file tax returns using another individual’s Social Security number. To reduce this risk, it is advisable to file your taxes as early as possible.
In many instances, a Social Security number can only be utilized on an electronically filed tax return, so early filing diminishes the likelihood of tax identity theft.
➡️ Note: The IRS anticipates that over 140 million individual tax returns for the 2024 tax year will be submitted by the April 15 federal deadline.
Another option for taxpayers is to request an identity protection pin from the IRS, which prevents unauthorized individuals from filing a tax return using their Social Security number or individual taxpayer identification number.
This pin serves to verify the taxpayer’s identity when submitting either an electronic or paper tax return, providing an additional layer of security. Many taxpayers can establish a PIN online; if not, they can complete a PDF form and send it to the IRS via mail or fax.
Be Cautious of Fraudulent Communications
The IRS reports that numerous individuals have fallen victim to tax-related scams, resulting in significant financial losses and compromised personal information. Recognizing the signs of these scams is crucial.
Typically, the IRS initiates contact via standard U.S. mail delivered by the U.S. Postal Service. To confirm the authenticity of any letter or notice, you can check the information on IRS.gov. Some correspondence may come from private collection agencies.
The IRS will not reach out to you through email, except in specific cases where you have opted in for email notifications related to your account or during criminal investigations.
Additionally, the IRS does not send unsolicited text messages to taxpayers. While they may call to discuss your case or verify information, such calls will not be unexpected. In-person visits are uncommon, and the IRS generally sends a letter in advance.
Fraudulent messages that claim to be from the IRS may often contain typographical errors or other mistakes. However, with advancements in artificial intelligence, these scams are becoming increasingly sophisticated and more challenging to identify.
✅ Advice: Avoid clicking on unfamiliar links in emails or texts, even if they appear to be from a known contact. Both emails and text messages can be easily faked, so it is wise to exercise caution.
Caution when Considering Offers
Scammers frequently attempt to deceive individuals regarding tax refunds and financial matters, often pressuring them for sensitive personal, financial, or employment information.
Indicators of a potential scam include unrealistic promises of large payouts, urgent demands for immediate payment, or threats of consequences for non-compliance.
Additionally, be wary of offers from individuals claiming they can secure benefits on your behalf in exchange for a portion of your refund. If someone requests a fee for a share of your refund, it is a significant warning sign.
Similarly, if they offer assistance with credit but refuse to sign your tax return, this is another red flag.
Stay Alert Against Pandemic Scams
In January, the Identity Theft Resource Center alerted consumers to criminals posing as the IRS through emails and text messages, attempting to convince individuals they qualify for a pandemic-related Economic Impact Payment (EIP).
These scammers aim to lure victims into responding or clicking on harmful links to steal personal and financial information for various fraudulent activities, as noted by the ITRC.
If you receive such messages, it is advisable to forward them to the IRS at phishing@irs.gov.
At Wave Tax, we consistently encourage our clients to be prudent and discerning about the information they share and with whom.
📌 If requiring guidance regarding you or your company’s tax obligations, please feel free to reach out to us at info@wavetax.us