Over the years, tax-related scams have become more frequent and sophisticated.
Those scams can take many forms, including multiple phone calls from those posing as IRS agents who are demanding payment or seeking personal information. In other cases, it could be a phony letter designed to look like one sent from the IRS.
In addition to that, personal information stolen during security breaches or phishing scams can be used to claim fraudulent tax refunds in a victim’s names. The News-Sun talked to several Springfield-based certified public accountants (CPA) on how to best avoid those scams as well as what taxpayers should know as the latest tax season approaches.
“Most people are aware that the IRS is not going to call you,” said John Marcum, the tax director for Clark Schaefer Hackett’s office in Springfield.
“The IRS isn’t going to call you and put that kind of pressure on you,” he added, noting that IRS agents do not call demanding payment or threatening jail due to unpaid fees.
In other cases, scammers will state that a taxpayer’s social security benefits have been compromised or they will ask for personal information. Marcum said that is a good indicator that the caller is not part of the IRS, since that entity would already have that information.
Bill Groeber —a CPA with Bennett, Groeber, Mullen, Feltner Co. (BGMF)— said those scams have grown rapidly with the progression of technology over the years. He said when he first entered the field 50 years ago, tax-related scams were mostly regulated to an occasional phone call or someone showing up to a person’s home. Now, a lot of those scams can originate outside of the state or country. Phishing scams can also come in the form of emails, which is not used by the IRS in order to send an official notice.
If issues do arise during tax season or if there is a problem with a tax filing or return, the Internal Revenue Service usually sends a notification through the mail.
“They usually send a notice if something is not right or needs to be addressed,” Marcum said.
Due to the sophistication of these scams, Joe Collinsworth, with BGMF, recommends that if a tax payer does receive a notice that appears to be from the IRS, they should contact an accountant or CPA.
The results of those scams can lead to the filing of fraudulent tax returns. Marcum said banks are becoming more diligent in stopping those opening credit cards using another person’s information. Instead, identity thieves can use a stolen social security number to get a tax refund.
Marcum said if that happens, it can be fixed, but it can be a major burden to the victim.
A few tips that the IRS says tax payers should follow include, safeguarding personal information, not engaging with suspicious callers or responding to suspicious emails, not clicking on links in a suspicious email, contacting supervisors to verify certain emails or messages or contacting the IRS or authorities.
Also in terms of the upcoming tax season, Groeber said it is important for taxpayers to keep up with the ever changing regulations in tax law. He said changes over the past two years include no longer having itemized deductions as well as the decision to expand limits on cash basis taxpayers.
Also for farmers, trading equipment is no longer a tax-free exchange, Groeber added.
Marcum said one thing that was brought back recently is residential energy tax credits that allow home owners to receive credit for making their homes more energy efficient.
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