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How to Avoid Tax Scams

Many people find taxes confusing and overwhelming because of the range of information they receive from the media and the general public about taxes and filing. One of the biggest problems that people encounter when trying to file their taxes is scams. There are many different types of tax scams that are commonly used, and they often result in people losing money and possible even failing to pay their taxes with the actual IRS. Here’s how to avoid falling prey to a tax scam.


Learn to recognize how the IRS communicates to avoid phishing scams.

The most common tax scam out there is a phishing scam, which is when a scammer will contact you pretending to be the IRS in order to get you to pay them. They also will often tell you that you are receiving a tax refund, but will ask for tons of secure bank account information. If the IRS needs to communicate with you, they will start by sending you an official letter. They will never leave you a voicemail or send you an email or text messages. If you get these sorts of calls or messages, just ignore them.


Familiarize yourself with tax requirements and policies.

In many cases, scammers will also encourage you to ‘rip off the government’ by completing your taxes incorrectly. You should stay away from anyone giving you this kind of tax advice at all costs, as the only thing that will result from this is you getting in trouble

with the IRS for not paying your taxes. You may be encouraged to enter false information on your tax return, such as zero income.

These scam artists may also try to convince you to send in the wrong tax form or just not pay your income taxes at all. Although they may have a compelling argument, stay away from these people at all costs.


Check tax preparers for legitimacy.

There are many fraudulent tax preparers out there that will prepare taxes incorrectly in order to take money from the taxpayer’s refund. Since the taxpayer must sign off on their tax return, there is no way for them to get that money back, and then they will end up in additional tax debt. Before you use a tax preparer’s service, check their background to make sure they have real training and real experience. Check with previous customers to ensure that their practice is ethical. In general, you should look for preparers with years of experience. You want to avoid tax shops that pop up in the beginning of the year and then disappear in May.


Report tax scams when you do encounter them.

If someone contacts you about tax practices that seem illegitimate, you should report them to the IRS before they can scam anyone else out of any money. The IRS publishes a list every year of the biggest tax scams to avoid and how to recognize them, and you can help educate others about these potential problems by reporting them.