by Thomas Keister
With the beginning of another tax season just a few weeks away, it is important to keep your guard up, as scam artists will come off the holiday season in high gear with a variety of tactics to try and score money or personal information from you, your friends, or your loved ones. Currently, three of the most popular scams going are phone and email-based tax scams, and charitable donation scams.
In email tax scams, you will receive an official-looking email, usually featuring the IRS logo and attempting to use tax-related language to convince them to update information by clicking a link. This is naturally a cover for the installation of malware, although in recent years, installed cryptocurrency mining software has also become prevalent. More advanced versions of the scam will even feature emails tailored to look like they are from friends or relatives to sell the scam. That warrants even more attention, as that makes it apparent that personal information has been compromised.
Hopefully, you were not one of the people who bought into the concept of a Do Not Call list when it was first floated. It wound up like most government programs- it became an utter hot mess, no matter how good the intentions were. With many scammers now using phone number "spoofing" programs to mask their calls as local numbers, it can be next to impossible to eliminate them from your life, save for the somewhat maddening ritual of blocking two dozen numbers a day on your phone.
If you find yourself brave, bold, or bored enough to answer one of those mystery numbers and hit one of these calls, you will most likely wind up listening to some idiot pretending to be an IRS employee. They will be attempting a collect an immediate payment for a tax debt, often employing an aggressive tone or threatening legal actions, such as a lawsuit or law enforcement involvement. Just laugh at them, hang up, and block the call. Or curse at them. Whichever works for you.
Charitable donation scams are the worst. Not only do they rip off good-hearted people, it leads to a sense of mistrust of charities, which leads to fewer donations to legitimate charities, which can be vital during times of crisis or disaster. I have worked in the past as a professional fundraiser, and it was always tough to have a good client that we struggled with because of that mistrust from the public.
Using names similar to larger national organizations and employing a rapid-fire script delivery, these callers will attempt to pluck your heartstrings, stoke your patriotism, or play into your outrage at a hundred words a minute. Don't fall for it. There are disclaimers and other language fundraisers are supposed to use over the phone, and they figure as long as they wing it by you like they are running a cattle auction, then their bases are covered. Fine print is still fine print, even if you heard it as gibberish on the way by.
So how do you handle these situations? Easy. Know upfront that the Internal Revenue Service will simply never demand immediate payment for anything. There is a clearly defined process for collecting a tax debt, including appeals and negotiations of final payment amounts and terms that must be followed before one red cent is expected. The Internal Revenue Service will never call you or email you, let alone have your friends or relatives do it for them. The IRS handles its business the good, old-fashioned government way- via United States Postal Service snail mail.
Never donate to a charity, even a large nationally known organization, over the phone. Yes, it is convenient, and you might get a warm and fuzzy from helping out (with the fifteen to eighteen cents on the dollar most legitimate charities have left after overhead and operating expenses), but just no. Ask the charity's phone rep to send you information through the mail. They already have your phone number, so the odds are good they have your address as well. A legitimate organization will be patient enough to handle your donation that way. You can either just throw it away, or you can use the information to check out the charity on the IRS website to vet their legitimacy with the Tax Exempt Organization Search. If you decide to make a donation, always do so in a manner that creates a record of the transaction, such as a check.
Keeping these practical and common sense moves in mind, you should have no problem navigating tax (and tax refund) season. Now, get back to blocking all those numbers on your phone...
by Thomas Keister
For most taxpayers, filing their tax returns and getting their refunds is no big deal. However, problems can arise when the taxpayer is not quite prepared when they visit their tax preparer. These problems can be minor, but can delay filing, which in turn delays the processing and arrival of any tax refund.
First- Make sure your paperwork is together.
While the IRS urges all taxpayers to file a complete and accurate tax return by making sure they have all the needed documents before they file, your tax preparer will also most certainly urge the same thing. This makes the filing process must simpler, as everything can be accomplished in one setting, saving you multiple appointments to get through the filing process. This means making sure you have all:
W-2s 1099s 1095-As from the Marketplace if claiming the Premium Tax Credit
Interest statements Mortgage statements Student Loan statements
Receipts for charitable donations Receipts for work-related expenses
Receipts for childcare-related expenses Social Security statements
Social Security numbers for dependents
Typically, these forms start arriving in the mail in January, although some interest statements for investments and investments accounts may take into February to make it. Always check these statements carefully, and contact the payer immediately to have a corrected statement sent out.
Second- Know how the refund schedule works.
In recent years, changes have been made to how some refunds are processed, which has lead to confusion and anger in customers in income tax preparation offices all over the country. By law, and income tax return that is claiming the Earned Income Tax Credit or the Additional Child Tax Credit will not be issued a refund by the IRS before the middle of February. This was designed to ensure taxpayers receive the refund they are due by allowing the IRS more time to detect and prevent fraud.
The IRS is expecting the earliest refunds related to EITC and ACTC claims to be available in taxpayer bank accounts or debit cards starting on February 27, 2018. This is if the taxpayer uses direct deposit and there are no other issues with their tax return.
Third- Know the fastest ways to file your return and get your refund.
Electronically filing a tax return is the most accurate way to prepare and file. Errors delay refunds and the easiest way to avoid them is to e-file. Combining direct deposit with electronic filing is the fastest way for a taxpayer to get their refund. With direct deposit, a refund goes directly into a taxpayer’s bank account.
Just having these three tips in mind- organizing your information, planning the best way to file and receive your refund, and expecting a bit of a wait will save you a lot of hassle and frustration when it comes to getting through tax season 2018.
Tax, business, and consumer news and opinion. Curated and/or written by the HFG staff.
(c) 2017-18 Hoosier Financial Group, LLC
by way of mention...
Nothing contained in the articles on InfoPoint should be considered financial advice. All readers are expected to do their own research and team up with their own financial advisors before making any moves, financial or otherwise. Hoosier Financial Group, LLC takes no responsibility for any action taken by a reader before, during, or after reading any part of the InfoPoint blog or any affiliated internet texts.