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It’s Tax Time: Time to Be Aware of Tax Identity Theft

Tax season is ripe for identity thieves to strike. Do you know how to detect the warning signs that you have been the victim of identity theft? And if so, how to deal with it?

According to MyCreditUnion.gov, identity thieves will use a Social Security number, mother’s maiden name, date of birth, or account number to open fraudulent new credit card accounts, charge existing credit card accounts, write share drafts, open share accounts, or obtain new loans.

How Do I Prevent Tax Identity Theft?
Prevention of tax identity theft is the best way to try and protect yourself from what could mean serious financial devastation for you and your family. The National Credit Union Association has outlined steps you can take to prevent tax identity theft, such as:

  • Get an Identity Protection PIN (IP PIN) from the IRS
  • Check your mail and credit union account statements every month
  • Monitor your credit reports on a regular basis
  • Talk to your credit union about the identity theft resources they may offer

How Do I Deal with Tax Identity Theft If It Happens to Me?
One way to know if tax identity has taken place is if the IRS sends you a notice saying their records show that:

  1. You were paid by an employer you don’t know or
  2. More than one tax return was filed using your Social Security number.

The best thing to do in this case is to contact the IRS immediately. Representatives will work with you to get your tax return filed, get any refund due to you, and protect your IRS account from tax identity thieves in the future.

For much more information and resources on how to prevent or deal with tax-related identity theft, learn more from MyCreditUnion.gov.
 

IRS Announces Annual List of Tax Scams Known as the 'Dirty Dozen' for the 2016 Tax Filing Season

The Internal Revenue Service (IRS) recently published its annual list of tax scams known as the “Dirty Dozen” for the 2016 filing season. On a daily basis, scam artists often use aggressive and threatening tactics that involve phone scams and email phishing schemes. 

Tax payers that fall for illegal scams can suffer significant penalties and interest fees as well as possible criminal prosecution. In conjunction with the IRS, the Better Business Bureau (BBB) serving San Diego, Orange and Imperial Counties are reminding taxpayers that they are legally responsible for the information provided on their tax returns, even if someone else prepares them.

Here is the list of the 2016 “Dirty Dozen” Tax Scams to avoid:

  1. Identity Theft. Criminals file fraudulent tax returns using someone else’s Social Security Number. The IRS is making progress in pursuing individuals who commit identity theft.
     
  2. Phone Scams. Aggressive phone calls by criminals impersonating IRS agents threatening police arrest, deportation, license revocation, and more.
     
  3. Phishing. Fake emails or websites looking to steal personal information. The IRS will not send an email; don’t click on strange emails and websites.
     
  4. Return Preparer Fraud. Return preparer fraud is a yearly issue in which dishonest preparers prey on unsuspecting victims and commit return fraud.
     
  5. Offshore Tax Avoidance. Individuals and financial institutions that hide money and income in offshore accounts, hoping to evade paying additional taxes.
     
  6. Inflated Refund Claims. Be wary of anyone who promises a large refund, asks you to sign a blank return, or charges fees based on a percentage of the refund.
     
  7. Fake Charities. Be cautious of groups impersonating charitable organizations asking for donations, especially charities with names similar to nationally-known organizations.
     
  8. Falsely Padding Deductions. People who falsely inflate deductions or expenses on their returns to underpay what they owe and possibly receive larger refunds.
     
  9. Excessive Claims for Business Credits. Fraud involving the fuel tax credit is considered a frivolous tax claim. Improper claims generally involve failures to participate in or substantiate qualified research activities.
     
  10. Falsifying Income to Claim Credits. Inventing income to invalidly claim tax credits is illegal.
     
  11. Abusive Tax Shelters. Avoid using abusive tax shelters in hopes of paying fewer taxes.
     
  12. Frivolous Tax Arguments. Avoid making unreasonable and outlandish claims in hopes of evading paying taxes owed. These claims may be thrown out of court and you may be charged with a penalty of $5,000.

Avoiding any and all of these “Dirty Dozen” scams will help you file the most accurate and precise taxes. Additional information about tax scams and assistance with filing taxes can be found on the IRS website at www.irs.gov.  

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