Watch out for these Tax Time Scams

In just a few short weeks, Tax Day will be here. But, aside from the time, headache, and expense of filing taxes, there is another consideration you might need to worry about.

Scammers use this time of year to steal money from their victims. How do they do it? By filing a tax return before the victim can and claiming their refund. Most of these cases occur early in the tax season because the scammer is counting on their victim to file closer to the tax deadline. When they try to file, the account gets flagged, and an investigation holds up any legitimately expected refund. The process to identify the scam and correct the issue is lengthy, which means the money you might be counting on will be delayed by months, if not longer. You can fight this type of fraud by filing your taxes as soon as the IRS and your state begin accepting returns.

Scams come in all shapes and sizes. One particularly problematic scam making the rounds now is in the guise of a helpful “life hack” designed to maximize your refund. Sounds great, right? Not really. The scammers, in these cases, are telling victims how to lie on their tax forms to get a higher refund. Sometimes, the temptation is too much for a typically honest victim, but the consequences are severe. Not only are there penalties, but violators face prosecution. It’s not worth it for a few extra dollars back from Uncle Sam. Remember – if it sounds too good to be true, it is. Being honest, particularly on your tax documents, will save you from damaging your reputation – and worse.

Of course, scammers don’t just work between February and April’s tax season; they perpetrate scams year-round. Often, they will use the “off-season” to try and gather data. For example, they might send text messages, phishing emails, or mail to prompt their victim into making contact and providing sensitive information. In other cases, they might make a harassing phone call to make their target react quickly out of fear.

As a reminder, your personally identifiable information and your financial information should always be safeguarded. You can’t control how all your data is used or how accessible it is online, but don’t give the scammers any assistance in perpetrating fraud.

·         NEVER give out your social security number, credit or debit card numbers, or other sensitive credentials to someone you are not sure about their identity or their reason for needing the information in the first place.

·         NEVER provide your card PIN, security codes, or login details to anyone.

·         NEVER click on links in an unsolicited email. Instead, remember to hover over the sender’s information to confirm their identity. When in doubt, contact the organization or entity by using a known, published phone number instead of interacting via email or an unexpected phone call.

What other ways do you fight fraud? I want to hear from you. Leave a comment below or email me.

Krista Kyte is a personal finance blogger and personal banker with over 20 years of experience in the financial industry. Krista is passionate about helping our members understand their financial situations. She writes tips that help consumers reach and maintain financial security and start living the life they’ve always wanted.