How to Avoid Tax Scams

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Avoiding Tax Scams

With tax season coming to an end, many consumers are now trying to pull themselves out of some of the worst tax scams they have ever experienced. Some are finding out first hand what it feels like being scammed during tax season while for others it is a constant reminder that you have to make sure you are careful during tax season.

According to a report issued by the IRS, thousands of people have lost millions of dollars due to ax scams and fake IRS communications in recent years. Below are popular scams and how you can avoid them:

You Are Under Arrest

One of the most popular IRS scams to date, is when individuals pose as officials from the IRS to notify you that you are under arrest for not paying your taxes. Please note that the IRS will never call you to tell you that you will be arrested so don’t ever feel pressured to give away personal information over the phone. Once you hang up call 911.

We Need Your Social Security Number

Another popular IRS scam is having people pose as IRS officials to ask of your social security number. Once again, the IRS will never call you over the pone and ask you to disclose personal information such as your social security number especially not over the phone.

Downloading Unknown Software

Receiving an email to download unknown software is by far one of the oldest tricks in the book. Don’t ever download any software from unknown users because it may be an attempt from an online thief to steal your information.

The best and easiest way to avoid unknown IRS scammers is to know that the IRS will only contact you via mail and in rare cases via phone. If you are ever in doubt if a communication is coming directly from the IRS, call your local IRS and ask. While it may make you feel crazy for asking if they’ve called it’s always better to be safe than sorry.

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How Identity Theft Victims Can Survive Tax Seasons

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Identity Theft

Each and every year, millions of Americans deal with the unfortunate event of having their identity stolen. According to the FBI, identity theft is one of the fastest growing crimes in America. We have all become increasingly vulnerable as a consequence of technology: in recent years, cases of online identity theft have tripled.

Losing your identity can be a stressful event at any time during the year; however, it can turn into a veritable nightmare during tax season. Here are just a few ways you and your family can survive tax season after your identity has been stolen:

Remain Vigilant

Before tax season even begins, remain vigilant. Keep monitoring your credit report and also make sure you report anything you receive in the mail which looks suspicious, especially if it could impact your taxes.

Report to the IRS

You should immediately report the theft to the IRS. The IRS can’t protect you from the things they don’t even know exist. The moment you realize your identity has been stolen, make sure you report it.

File On Paper

If you have been a victim of identity theft you may be required by the IRS to file a paper return. This will also allow you to file pertinent identity theft paperwork along with your tax return.

Beware of Scammers

Scammers are on the prowl especially during tax season. Make sure you know that the IRS will never contact you to tell you that you owe money. Anytime someone calls and pretends to be the IRS, make sure you report them because it’s a scam.

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How to Avoid IRS ID Scams

Although it seems hard to pull off, IRS scams happen all of the time. Scammers have a way of creating documents using stock IRS logos to replicate letterhead. In some cases, consumers are emailed or called on the phone. Here are a few tips to help you avoid IRS ID scams.IRSScamAlert

Follow TAP

TAP is the Taxpayer Advocacy Panel. This panel works to identify tax scams and provide information on such scams to the IRS. Their main goal is to help protect taxpayers. Phishing scams are often caught by TAP. The IRS investigates all of the claims sent from TAP.

Know IRS Methods of Contact

Do you know how the IRS contacts taxpayers? They contact through the mail only. Any other contact should be ignored by you but still reported as it may be a new scam that hasn’t been investigated. The IRS will send paper mail, which you should also research for validity. Some scammers are getting smarter and using the U.S. mail delivery system to defraud taxpayers.

Be Aware of Proper Payment Methods

The IRS will never ask for your payment information via email or over the phone. You should never be directed to a third-party website to make a payment. All online IRS payments are done right on their website.

Closing Thoughts

If you receive suspicious communications from entities claiming to be the IRS, report it to your local police and the IRS immediately. Internet communications may be able to be tracked. Do not respond to any email requests as this can damage your computer or allow scammers to steal your personal information.

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The Biggest Tax Scam Ever

America’s top corporations are moving businesses overseas in order to dodge billions of dollars in taxes. Top establishments from tech industry giants such as Microsoft to popular fast-food chains like Burger King are all jumping at the opportunity. Over the next decade it’s estimated that this corporate inversion could cost the US government nearly $20 billion in revenue.TaxScamPhoto

Where Is Our Money Going?

From Bermuda, Ireland, Canada, and even the Cayman Islands, over 100 companies have renounced their United States citizenship in order to claim a lower tax rate with foreign governments. Money which could otherwise be paid for public roads, bridges, start up jobs, or even lower the American deficit is being stuffed back into corporate pockets.

What Are Tax Inversions?

Tax inversion is a corporate method of relocating a businesses’ legal residence to a nation with a lower tax rate while retaining its normal places of operations. If these waves of tax inversions continue, they will threaten the American economy. In the last few years the IRS has finally collected more tax receipts before the crash in 2007, but further examination reveals that the numbers aren’t what they should be. Corporations pay less in federal income taxes than a year before The Great Recession.


Two-thirds of the American population believe that larger corporations should be paying a higher amount of taxes. They urge the United States government to close corporate tax loopholes and bring the system to justice. Until Capitol Hill gets involved, the system will continue to be corrupt.

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A Quick Explanation of the Federal Student Tax Scam

Scammers in the United States engage in a recurring ploy which involves impersonating an official of the Internal Revenue Service. These scammers assume that people will be afraid of an IRS official and give them whatever information or money they demand.TaxScamPhoto

Some scammers try to get unsuspecting taxpayers to pay a bill over the phone. Occasionally they try to con human resource professionals into giving W-2 information over the phone. The latest variation of this scam targets students. In this article we will explore the details of this scam and provide tips on how to avoid becoming a victim.

The Student Tax Scam

The new variation of this recurring scam attempts to convince students to wire money directly to the scammer. In this scheme, the scammer will call a student taxpayer claiming to be an IRS representative. The scammer will try to get the student to wire them money to pay off an alleged tax bill. If the victim does not respond quickly enough, the scammer will threaten to send the victim to jail.

Avoiding this Scam

Now that you know this scam exists, you may be wondering how you can avoid falling victim to this scheme. First of all, realize that the IRS will never call you to discuss any taxes owed without mailing you a bill first. The Internal Revenue Service will always give you a chance to review the amount you owe and appeal if you disagree. If you suspect someone is trying to impersonate and IRS representative, don’t give them any personal information. Instead, try to get as much information from the person on the phone as you can. Report this call to the FTC and the IRS.

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Why Do Illegal Immigrants Steal Social Security Numbers for Taxes?

Illegal immigrants often obtain the social security numbers of the deceased in order to create an appearance of legality. One of the biggest problems surrounding this matter is that the IRS really isn’t doing anything about it. The IRS has stated that it is not actively making corrections to current policy reflecting this issue.ImmigrationPic

Obtaining Employment

Immigrants need to work to support their families just like everyone else. Sometimes, however, they go about obtaining proper documentation in an improper fashion. It is creating a false identity, and in most cases, the name and profile of that deceased person isn’t even a close comparison. Even so, oftentimes this false identity is sufficient for them to obtain some type of employment in the U.S.

Obtaining Housing

In order to rent or purchase property, you have to show that you can legally reside in the United States. Questions on applications clearly ask if the applicant can legally live in the U.S. and if proper documentation is available. The thing here is, most rental agencies do not check thoroughly into the social security number supplied by the applicant.

Obtaining Benefits

Even when a social security number does not match the number on the photo ID of an immigrant, they can still obtain state-paid benefits like food stamps and healthcare coverage. Some programs, city-funded, also require proper documentation.

Bottom Line

Many agencies do not double check numbers and often bypass incorrect matching notifications. For these reasons it seems likely that the issue may never be solved. If the government and IRS say that they ignore notifications of mismatches, who’s to say that other institutions don’t do the same thing? What many don’t realize is that this will create a much larger issue in the future as Social Security claims may attempt to be made from those invalid numbers.

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Four Tax Scams You Should Know About

ScamsScammers are everywhere these days trying to take away the hard-earned money of honest people. This year know what to look out for by reading these 2015 tax scams to be aware of.

Phone Scams

The IRS is not going to call you on the phone and threaten you in an aggressive manner. If you receive one of these calls, hang up and report them to the IRS immediately. The caller may threaten to have your license revoked, have you arrested or even deported. Do not feed in and give them your financial information because if you do you will have a hard time getting your funds back.

Email Scams

The IRS is not going to email you about your bill or refund. Do not click on the links in these emails because they could direct you to a site that steals your personal information. Instead, delete the email immediately and change your email password for extra security.

Identity Theft

Never give out your personal information over the phone to anyone. Once someone has your social security number, it makes it easy for him or her to file a fraudulent tax return and steal your refund. While eventually you will get your refund, it will be significantly delayed and other financial crises could occur because of having your identity stolen.

Return Preparer Fraud

When having someone file your taxes, do not try to take the cheap route. Go to a professional and established business so you don’t find yourself in trouble with the IRS and the preparer nowhere to be found.

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