7 signs you’re the victim of a tax scam

Tax season is officially in full swing, and it’s the busiest time of the year for scam artists. Crooks are working overtime to get their hands on your tax refund and personal information. It’s important to have your guard up whether you prepare your own taxes or seek professional assistance, as these people have subtle ways to get the best of even the savviest taxpayers.

The Treasury Inspector General for Tax Administration estimated that tax refunds claimed by identity thieves might have cost taxpayers as much as $21 billion from tax years 2010 to 2014, according to Consumer Reports. Don’t get taken advantage of this tax season. Stay on top of the latest tax scams and tactics used by thieves.

7 Ways to Recognize a Tax Scam

Feeling a bit suspicious about a tax preparer, strange questions posed by the IRS or bogus tax rules you’ve never heard of before? Here are the seven ways to spot a not-so-obvious tax scam before disclosing your personal information:

1. Personal Information Requested by Email

If the IRS sends an email asking you to divulge personal or financial information, you’re probably not speaking with an actual IRS employee. There’s currently an email phishing scam circulating where con artists pretend to be IRS representatives and send you a link to a site that looks exactly like the official IRS website. They’ll alert you that “you are to update your IRS e-file immediately” and mention USA.gov and IRSgov (without the dot in between “S” and “gov”). If you get this email, do not respond. Instead, forward it to the IRS at phishing@irs.gov.

2. Guaranteed OIC Qualification

When working with a tax debt company, be wary if you’re told you qualify for an Offer in Compromise (OIC) before you even agree to be a client. If a tax consultant tells you you’re eligible without closely examining your case, that consultant is probably a scam artist.

3. Pressure to Inflate Charitable Deductions

Tax deductions are great but only if you do it the honest way. Any tax preparer who encourages you to embellish the amount of money you contributed to charity the previous year is up to no good. Instead of paying a flat rate, these people ask for a percentage of your refund. Thus, they want you to get as much money back from the IRS as possible. Steer clear of these unethical tax preparers, as they’ll only get you into trouble with the IRS.

4. Fee Based on Percentage of Refund

To further elaborate, a tax preparer who bases their fee as a percentage of your refund is definitely up to no good. In fact, the National Association of Tax Professionals conducted a survey in 2010 that covered fee structures used by tax preparers. The results revealed that most professionals charge a set rate for each tax form, which can vary based on the complexity of each client’s current tax situation.

5. Business Is Slow

The average tax preparer works notoriously long hours during tax season, because they’re flooded with business. According to Monster.com, spending 12 to 14 hours a day in the office is not uncommon at all. If you’re instantly able to get an appointment with a tax preparer and arrive at an eerily quiet office, take this as a red flag that something shady is going on.

6. Promises of a Higher Refund

Who doesn’t want to receive a large refund check from the IRS? Scam artists are well aware of this, and they’ll flash the promise of major dollars to draw you into their grips. The truth is it doesn’t matter which skilled, reputable tax professional prepares your return — your refund is going to be the same size. If someone promises a larger refund, they have some tricks up their sleeve that you don’t want to be involved with.

7. You’re Pressured by Phone

If you receive a phone call from the IRS demanding immediate payment, asking you to divulge your credit or debit card numbers or threatening to call the police if you don’t comply, you need to hang up immediately. There’s currently a phone scam making the rounds, targeting taxpayers like you. Con artists pose as IRS employees, using fake names and badge numbers, to try to get you to reveal your financial information. Regardless of how much these people seem to know about you, never give them any information.

This tax season, don’t become a victim of an elaborate tax scam. Keep these tips in mind as you fill out your tax forms, whether you’re doing it by yourself or with the help of a tax preparer.