If you’re getting nervous about getting your taxes done on time, you’re not alone. The April 15th deadline looms large and always causes anxiety, yet this year the anxiety may be increased by one of the most prevalent scams in US history.
We covered the outline of that particular scam in a previous blog post. As it relies so heavily on phone contact, you have an advantage if you’re aware that the IRS never demands credit card numbers over the phone. You can simply hang up the phone and ideally report the incident to authorities.
While this notorious phone scam has cheated over 3,000 Americans and counting out of money, tax-related identity theft was reportedas the leading scam that targeted Americans. The FTC noted over 100,000 such complaints in 2014 alone, almost a third of all such complaints.
This means there is more than one type of scam that makes the rounds during the tax season. While some rely on email and even snail mail, scam artists know that the most effective means for cheating their victims is over the phone.
The immediacy of phone contact allows for an entirely different level of pressure to be applied upon the vulnerable, unsuspecting or confused. Check out Leonardo DiCaprio’s character in The Wolf of Wall Street to see this effect most vividly.
Remember: when in doubt, a simple first step in investigating a suspicious call is to verify the origin of the phone number through a reverse look-up.
Here are some of the other tactics of phone scammers during this time of year and when to hang up on them:
Asking for your Social Security number
Any organization unknown to you that asks for your social security number should raise a red flag and be a reason to end the conversation. Unless you are opening a new bank or investment account, no third party needs access to your social security number.
Thieves can use this key identifier to open credit cards and even divert your tax refund to their accounts. The IRS has over half a million such complaints like these on file, which shows that many people aren’t being careful enough with the security of their social security number.
An Invitation to High-Priced Seminars
A long-running tax-season scam involves invitations to seminars, typically costing upwards of $1,000, where attendees are given bullet-proof strategies for lessening their tax bill or avoiding certain types of taxes altogether.
Unfortunately, most of these strategies are either invalid or outdated, and completely useless when dealing with the IRS. When participants figure it out any trace of the con artists have vanished.
While many tax season scams seem outlandish, keep in mind just how many people fall victim to such incidents every year.
Keep in mind some basic tips to stay out of trouble:
Know who’s calling you. Take steps to verify the phone number and that the person who is calling you is who he or she says they are.
Know your own financial situation. You should know exactly how much money you owe the IRS (or don’t) and be proactive about address the situation through a payment plan, if needed.
Understand how the IRS works. The IRS typically doesn’t act like run of the mill credit collection agencies. They will send correspondence through the mail and won’t harass you multiple times of day for payment.
We hope these steps will give you a leg up on the tax-season scam artists and identity thieves that will be working overtime through April 15th.