As tax season approaches, it’s crucial to be aware of scams that can threaten your financial well-being. Scammers are becoming increasingly sophisticated, using social media and other channels to try to steal personal information or encourage risky behaviors that could harm your business. Here’s a roundup of the most common tax scams circulating, according to the IRS, and what you can do to protect yourself and your business.
Fake Charities Seeking Donations
Scammers often take advantage of people’s goodwill, especially after natural disasters or high-profile tragedies. These fraudsters pose as charitable organizations to trick you into making donations. Beyond stealing your money, they may also gather personal information to commit identity theft.
How to Protect Yourself:
- Verify the legitimacy of any charity before making a donation by using the IRS’s Tax-Exempt Organization Search Tool.
- Be especially cautious if a charity contacts you directly by phone or email asking for donations.
Misleading Tax Advice on Social Media
Social media is a hotbed for bad tax advice. Videos and articles frequently share inaccurate information, such as urging people to misuse tax forms like Form W-2 or Form 1099 to inflate their refunds. Some of these scams have become more convincing by using terms like “AI-generated tax strategies” to sound credible, but they can lead to serious trouble with the IRS.
How to Protect Yourself:
- Avoid relying on tax advice from social media or internet sources.
- Remember that AI tools can also produce inaccurate or misleading information.
- Consult with us since we understand your business needs and can provide tailored, accurate advice.
Scams Involving IRS Online Account Setup
Scammers may offer to help you set up an online IRS account, claiming it will make managing your taxes easier. While the IRS online account tool is legitimate, it’s also a prime target for identity thieves. They use information from your account to file false tax returns and attempt to claim refunds in your name.
How to Protect Yourself:
- If you need assistance setting up an IRS online account, let us know and we will help you with it.
- Avoid sharing sensitive login details with anyone you don’t know personally.
Phishing and Smishing Scams
Fraudsters are using email (phishing) and text messages (smishing) to trick people into sharing sensitive information. Often, these messages appear to come from the IRS and include alarming language like, “Your account has been put on hold!” The goal is to lure you into clicking a link or sharing your personal information, which can lead to identity theft.
How to Protect Yourself:
- Never respond to unsolicited emails or text messages claiming to be from the IRS.
- Do not click on links or provide any personal details.
- Forward suspicious emails, including full headers, to [email protected].
With scammers constantly evolving their tactics, it’s easy to fall victim if you aren’t cautious. Always double-check the authenticity of any tax-related communications and never share sensitive information with unverified sources. By raising awareness of these scams, we can help reduce the number of victims and protect our community’s financial well-being.
If you have any questions or need assistance, reach out to our team at Bailey Scarano. We’re here to help Connecticut business owners make smart, secure financial decisions.