Tax season is here. The IRS expects to receive more than 144 million individual tax returns this year and has set the filing deadline of Tuesday, April 17. It also expects a surge in tax scams.
"Scam artists will tempt people in person, online and by email with misleading promises about lost refunds and free money," IRS Commissioner Doug Shulman said. "Don't be fooled by these scams."
The IRS recently released its "Dirty Dozen" list of 12 scams people need to watch out for when filing their taxes online this year. Identity theft topped the list. Scammers aim to steal personal information that they can use to file a fraudulent return and claim a refund. Look for emails that say more than one return was filed in your name, or that you received wages from an unknown employer -- both will contain an urgent message to contact the sender or contain a link to a website. Delete.
Ranked second on the list was phishing, a variation of the top scam. Watch for unsolicited emails claiming to be from the Internal Revenue Service or an organization associated with the IRS, or from the Electronic Federal Tax Payment System. Bottom line: The IRS does not initiate contact by email, text or on your Facebook page. Delete.
The IRS also warned against tax preparer fraud, ranked third on the list. The agency expects 60 percent of taxpayers to seek professional help to file their returns. This always has required checking the credentials of someone you hire to prepare your tax returns, but with the rise of online do-it-yourself services, it now means verifying sites as well.
Scammers have been known to "spoof" legitimate websites, and this could be the year they try it on tax preparation sites. A spoofed site is an almost identical copy of a real site, and it can be tough to distinguish between the two. Spoofed Twitter and Wikipedia sites were taken down last month, but not before an undisclosed number of visitors had been tricked into handing over their cell phone numbers to win a free iPad and were charged $2.30 for each text sent to enter the bogus contest.
How did the scammers do it? By using a technique called "typesquatting," in which a commonly misspelled version of the original site is used as the spoofed site's Web address or URL.
Never trust a link supplied to you from email. Be wary of search engine results. If possible, use your own browser bookmarks -- saved addresses of sites you've used in the past -- or type the web address into your browser. And double-check your spelling before you hit "enter."
Further, always check the address bar in your browser when you open a site. Look for a lock icon that indicates you are on a secure website validated by a trusted third party. All financial institutions and the IRS use secure connections indicated by "https" at the beginning of the address. If you don't see the "s," it's not secure and you should close the window.
Finally, be on the lookout for phishing emails that appear to be from your online tax service. Intuit, parent of TurboTax, says it has seen a "marked increase" this year in reports of fraudulent emails. A fake Intuit email has already climbed to the top of ScamTrends' list for March. Subject lines have included "Your Intuit.com order confirmation" and "QuickBooks Security Notice."
It's easy to get confused, and that's what scammers are hoping for. While legitimate tax services do send emails to remind you to file your return or to update you on the status of your return, they don't ask for your personal information in an email. Delete.
Now that you've prepared for the worst, you deserve a reward. SaveUp, a free, nationwide rewards program that offers incentives for saving money and reducing personal debt, has launched a tax season campaign with TurboTax that rewards people for filing their taxes on time. You could win one of two $10,000 prizes.
The SaveUp program is linked to 18,000 U.S. financial institutions. When you enroll in the service, you'll earn points for "good behavior" such as paying off loans and making deposits into your savings account. Points can be used to enter regular drawings and for chances to win the $10,000 tax day prize.
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