Do you dread tax season? Well, for some people, tax season is the most wonderful time of the year. Scammers are constantly looking for ways to get their grimy hands in your pockets. And tax season is a popular time for them to strike.
Tax fraud is big business. Tax refund fraud alone affects many people each year and costs the government millions of dollars. In 2016, banks stopped 108,539 suspicious refunds and returned them to the IRS. These suspicious returns totaled $239 million.
Each year, the IRS reports a list of the top tax scams the public should be aware of. Many of these scams can result in a fraudulent return being filed on your behalf — or worse. Let’s take a quick look at some of the worst tax scams to watch out for this year, including a suspicious phone call to watch out for (No. 9), and what you can do to protect yourself.
1. Identity fraud
“Identity theft occurs when someone uses your personal information, such as your name, Social Security number, or other identifying information, without your permission, to commit fraud or other crimes,” according to the IRS. “In many cases, an identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund.”
Roughly $16.8 billion was stolen from 16.7 million Americans this past year, according to Javelin Strategy & Research’s Identity Fraud Study. Furthermore, over the past six years, identity thieves have stolen more than $107 billion.
Next: Taking advantage of people who give back