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5 Ways to Avoid Tax Scams

Posted by Edna & Roger Boisjoli on March 22, 2012 at 10:50 AM Comments comments (0)

Tax season is stressful enough without having to watch your back for scammers and crooks. LegalShield has tips for you. The following 5 tips will help you avoid common tax season scams.

1.  Beware of Email – The Internal Revenue Service (IRS) and the Canada Revenue Agency (CRA) do not initiate contact via email. If you receive an unsolicited email from either organization, it is a scam.

2.  There is No Free Money – Many of those who fall victim to tax scammers succumb to the promise of “free money from the government.” Many scammers post signs in churches and community centers offering quick relief from financial hardship. Do not fall victim to these offers; there is no free money to be had from the CRA or IRS.

3.  Keep Your Identity Secure – The information contained in your tax forms is a goldmine for scammers and identity thieves. With the detailed information contained in those forms they could file a false tax return in your name or open new lines of credit. Keep your tax documents in a secure location. If you store your documents online make sure they are password protected and encrypted.

4.  Check Behind Your Preparer ­– Many individuals hire professionals to help them file their taxes. Most tax professionals do a great job and provide honest service, but there are some who prey on unsuspecting taxpayers. Fraudulent preparers will attempt to inflate a taxpayer’s return and take a cut for themselves. When the IRS discovers the fraud it is the taxpayer who is left holding the bag. Beware of any preparer who will not sign the return or include their ID number, charges a percentage or split of the return and promises huge returns. When in doubt get a second opinion.

5.  Check These Resources – The IRS and CRA offer more detailed information of current TAX scams. View the IRS’s Dirty Dozen here or the CRA’s Security Resource Page here.