As tax season continues, newer tax scams continue to arise. Tax scams can take a variety of new forms with modern technology. Being aware of the different types of tax scams and the red flags that come with them may help you avoid them yourself. If you do find yourself falling into bankruptcy because of a tax scam, then consider asking a Chattanooga bankruptcy lawyer about your options.
Types of Tax Scams
Tax scams take a variety of forms in the modern world. Some of the most common types of tax scams are by email, phone, and in-person tax preparers. These scams can involve fake W-2 wages, charity fraud, identity theft, unemployment benefits, and ghost tax return preparers.
A ghost tax return preparer will prepare a tax return for you but will not sign your tax return. This can be a sign of someone trying to make money from false promises to you in exchange for a service fee. Online and phone scams can trick consumers into trusting them with personal information and paying unreasonable fees.
Newer phone tax scams are more sophisticated at pretending to be the Internal Revenue Service (IRS). What often happens is the impersonator demonstrates what they know about you then they say you owe them money. They will often have you send the money through a gift card or wire transfer. Exaggerated threats like arresting you or license suspension are often used.
Email tax scams will not only target adults working in the community but also college students and university employees. These email scams will use pandemic-related phrases, tax transcript malware, and phishing scams to steal tax software credentials.
You can report tax scams by contacting the Treasury Inspector General for Tax Administration (TIGTA) online, by phone, or through email. Avoid tax scams by learning about common red flags, verifying details on the IRS website, and not providing personal information based on exaggerated threats.
Tax Scam Red Flags
There are several tax scam red flags to look out for during tax season. One of the most common red flags is being contacted by phone first. The IRS almost always contacts people through letters in the mail before ever contacting them by phone. Exaggerated threats of police and legal action at the onset are more likely scammer tactics since tax agencies do not usually do this.
Automated messages about tax problems on your end are often scams. So are emails with odd domain names and phrases related to tax refund payments, COVID, and natural disasters. Do not click suspicious links in these emails and do not open attached documents. This could lead to your private information being stolen.
If any of these sources ask you to pay in strange ways like a gift card, then they are likely scammers.
Contact Tom Bible Law Today
You may not have to go through financial stress alone. All you have to do is contact us at Tom Bible Law today at (423) 424-3116 for a consultation about your finances. Our legal team of Tennessee bankruptcy attorneys might be able to help you escape your financial dilemma through bankruptcy. We are located in the Tennessee cities of Chattanooga, Kingsport, and Tullahoma.