Tax scams. It may not be a fun topic, but scammers are out there constantly, working their deceitful ways to profit from the unaware or unprepared. Scammers prey on both individuals and businesses and they do so at any time, not just during tax season.
First, Be on Alert for These Types of Scams
Tax scams can come in the following ways:
A scammer will call a business claiming to be from the IRS, demanding immediate payment via wire transfer, gift card or some other means. Threats for non-payment will follow, including arrest and suspension of a business license.
Simply know that the IRS:
- Does not use the telephone to make contact. Rather, it uses the US postal service.
- Does not call businesses or taxpayers demanding payment or making threats.
- Does not ask for credit card or bank information.
Emails may come to you appearing that they come from the IRS, asking for bank information, Social Security numbers or financial information. Know that the IRS does not send emails. Always be suspicious of misspelling and blurry logos. Never click on a link seeking personal information.
An email may come to you from within your company asking for W2 information for an employee. This information is then sold or used for identity theft or tax fraud.
Bogus Charity Scams
You may receive an email soliciting a charitable gift, with the purpose of diverting your donation to a non-existing entity (and, you get no charitable tax deduction.)
9 Simple Precautions to Avoid Tax Scams
Avoid tax scams with these simple precautions:
- File your taxes early. A fraudulent return would be seen as a duplicate return. An IRS agent would see two returns using the same identity information and flag the returns for checking.
- Never give out your business address, date of birth, Social Security information, bank information or credit card information over the phone to anyone that you don’t know and trust.
- If you get a fraudulent scamming phone call, hang up immediately.
- Be watchful for internet and email phishing schemes and scam communications.
- Review your business credit report regularly.
- Donate only to charities that you know are genuine. Be particularly cautious about disaster relief charity efforts that might be bogus.
- Set up your business as a formal business entity (LLC, C or S Corp), and keep your business and personal assets separate.
- Keep all business records safe, in order and with access only to specific individuals.
- Always use providers of business services that you know are reputable.
Find the Right Accountant for Expert Financial Assistance
Contact Estess CPAs, based out of New Orleans, LA for expert help with your financial needs and to help keep you safe from tax scams. Estess CPAs specializes in serving the needs of small businesses with accounting, bookkeeping, tax planning, and payroll services.