Financial Focus: Beware IRS Tax Scams

anthony_rivieccioFinancial Focus: Hello, I am calling from the IRS!

By Anthony Rivieccio, MBA, PFA

So, have you received a call saying you owe a lot of money to the Internal Revenue Service (IRS)?

Yes, It is a tax scam.

The IRS does not solicit payments by phone. It will not send emails. If the agency needs information from you, they write a letter first.

Scammers, far and wide, still telephone millions of Americans to get personal information. And it does not stop people from falling for it.

In one scam still operating, people have been called by would-be swindlers, and more than 5,000 victims have handed over $26.5 million, according to the IRS.

Here are four ways to avoid tax scams:

1. Shred, shred, shred

Be sure to shred all documents containing personal information, such as your Social Security number, home address, and birth date.

Spend a little extra and get a cross-cut shredder,  because a straight-cut shredder is still tempting for thieves – they can take the shreds out of the garbage and piece them back together.

2. Follow the two FEs

File Early and File Electronically.

A 2011 audit found that the IRS paid out $5.2 billion in refunds to scammers in 2011, even as it blocked about $6.5 million from getting into the wrong hands.

Filing electronically can help keep your financial information secure by making sure a paper document with your Social Security number, address, salary and bank account information does not get diverted through the mail.

3. Get Smart

Tax scammers come at all angles.

One new scam is an email that seems to come from your payroll service saying your W-2 form was compromised in a data breach. You are asked to click to find out how to protect yourself, and then once you do, it asks you for your Social Security number.

The best way to avoid these scams is to be aware and to not readily give out your Social Security number, especially via email.

That extends to how you communicate with your tax professionals emailing documents back and forth. Your preparer should password protect the documents and have a secure server.

4. Know your relatives

Even if you avoid being taken to the cleaners by strangers, there could be dangers lurking in your own home. I’ll put it in nicer terms: You probably know them!

Your nefarious relatives will probably know where you store sensitive information and have answers to easy security questions like your pet.

 

Anthony Rivieccio is the founder & the CEO of The Financial Advisors Group, celebrating their 20th year as a fee only financial planning firm specializing in solving one’s financial problems. Anthony, a recognized financial expert since 1986, has been featured by many national and local media including: Klipingers Personal Finance, The New York Post, News12 The Bronx, Bloomberg News Radio, Bronxnet Channel 67 TV, The Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Bronx News and The Bronx Chronicle.

For financial assistance or a FREE COPY of a 2015 Income Tax Guide, Anthony can be reached at (347) 575 5045 .

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