Nearly one in three Americans (31%) report being a victim of online financial fraud or cybercrime.
When it comes to protecting your money and your identity, knowledge is power. Here’s a recap of the last six scams on the IRS’s 2024 “dirty dozen” list.
7. “Ghost” tax return preparers. Be wary of “professionals” who claim they can help you obtain tax credits or refunds that you don’t even qualify for. Watch for red flags like a high fee based on the size of the intended return or their refusal to include their PTIN (IRS Preparer Tax Identification Number) on the return. These ghost preparers can even steal your entire refund before pulling their disappearing act.
8. Trusting social media. This is a message that sadly bears repeating: Social media platforms like Instagram and TikTok are not reliable sources for tax advice. If a Facebook ad suggests filing inaccurate W-2 forms to increase your tax return, for example, don’t give it a second thought. Remember, just because it’s on the internet does not make it true. Always consult with your tax professional.
9. Spearphishing. A targeted form of phishing, spearfishing aims to deceive businesses or individuals within an organization, typically via email. According to the IRS, scammers can pose as new clients or even as an HR department looking to score sensitive employee data. Always use extra caution when opening emails and clicking links. And think twice before sharing any information.
10. Faux art deductions. Taxpayers may deduct an art donation from their tax bill, but beware of deducting it at an inflated valuation. The IRS warns of “promoters” who sell discounted art with the promise it’s worth more, so it can be donated for a hefty write-off. Don’t fall victim to false claims of deductions on art donations. Uncle Sam will eventually find out.
11. Fake tax avoidance techniques. Taxpayers should be on high alert when encountering any schemes that assure you ways to avoid paying taxes. For example, syndicated conservation easement agreements may inflate tax deductions by exaggerating the value of investments. Bottom line: You can’t avoid paying the IRS.
12. International schemes. Individuals should be cautious of offers to contribute to foreign or overseas retirement accounts. Hiding money offshore as a tax reduction strategy can land you in hot water with the IRS.
As scammers continue their relentless attempts to commit fraud, heed the IRS’s warnings to maintain your identity, your reputation and your bank account. For a quick refresh, check out scams one through six. And don’t hesitate to reach out to the tax professionals at Magone & Company with any questions.
This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance that is specific to your unique circumstances.