Tax scams are prevalent during tax season from January to April, but they can also happen any day of the year. Many people, including those in the trucking industry have lost millions of dollars to tax scams, and we don’t want to be counted as one.
Scammers will try to get your hard-earned money or gather your personal information for their personal gain. And they use different schemes to lure you into their trap. As hotshotters where income comes from long drives and days away from your family, it’s vital not to let your guard down against these scammers.
Here are some of the common tax scams as listed in the IRS list of Dirty Dozens. The Dirty Dozen represents the worst of the worst tax scams:
1. Phishing Scams
Phishing scams typically happened through unsolicited email or websites that seem to be legitimate but they lure unsuspecting victims to give their personal and financial information.
In case you receive unsolicited email claiming to be someone from the IRS or an IRS-related function, report it to email@example.com immediately. And if you have experienced any monetary loss due to an IRS-related phishing scheme, please report it to the Treasury Inspector General Administration (TIGTA) right away, then file a complaint with the Federal Trade Commission (FTC) to make the information available to investigators.
The IRS also warns the public of tax return preparers who promise of inflated or larger tax refunds as this is a common scam during filing season. This scheme has also made it to the 2019 Dirty Dozen list of tax scams.
Most of the scammers involved in this scheme use phony storefronts, flyers and word-of-mouth tactics to attract their prey. They may dupe you into making fictitious rebates, benefits and tax credits, or file a false return in your name.
You shouldn’t participate in this kind of scheme as it is punishable by imprisonment and or penalties. Filing tax returns with this kind of false scheme may result in a $5,000 penalty.
3. Phone Scams
As the tax season is coming, you should also be alert on phone scams where aggressive scammers pose as IRS agents to get your personal information or steal money.
Phone scams (also known as vishing or voice phishing) are a major threat as they have caused many people to lose millions of dollars in recent years. According to TIGTA, this type of scheme has affected 14,700 victims, costing them over $72,000 million since 2013.
To avoid falling victim to vishing, the IRS urges taxpayers to be on the lookout for aggressive phone calls claiming to be from the IRS. Some callers may aggressively order you to make immediate payment with a threat to report you to the authorities if you don’t. Typically, they will ask you to make payments on specific terms like debit card or cash card payment or wiring money to a personal account.
Don’t fall into this trap. If you have to pay your tax, the IRS allows for easy ways to pay. You could check the IRS website for several payment options.
If you receive this kind of call, do not provide any information and hang up immediately. Report the call to TIGTA by using their IRS Impersonation Scam Reporting web page. Alternatively, call 800-366-4484.
Tax-related identity theft remains a serious crime affecting many people, and is why it has landed in the Dirty Dozen list. Scammers would normally get a person’s Social Security number or Individual Taxpayer Identification Number (ITIN) and use that information to file a fraudulent tax return to claim a refund. They use different schemes just to get the information that they want from you.
To avoid falling victim to tax-related identity theft, the IRS warns to treat personal information like cash. In other words, don’t leave it lying around. Be cautious of providing your personal details when filing forms, especially online.
5. Tax preparer fraud
Come tax season and many hotshotters hire a tax preparer to file their return. But before you get one, the IRS warns of the increasing cases of tax preparer fraud. The IRS also reminds taxpayers to be extra careful when selecting a tax professional as there are those who perpetrate refund fraud and other scams.
Here are some tips to consider when choosing a tax preparer:
- Look for a tax preparer who is available year-round so that you can easily contact the preparer in case there are questions about your tax return.
- Get a preparer with an IRS Preparer Tax Identification Number (PTIN).
- The preparer should have professional credentials or belong to a professional organization (ex. CPA or attorney).
- Get a preparer with a good history and no records of tax-related crimes or charges.
Scammers are just around the corner, lurking and looking for their next victim. You can avoid becoming their next prey by being aware of their common schemes. Aside from the scams listed under Dirty Dozen, there are many other types of tax scams that might affect hotshotters. Feel free to comment below if you are aware or have been a victim of these kinds of scams.