Schneiderman Provides Tips To Avoid Tax Scams, Urges New Yorkers To Report Potential Fraud To His Office
With this year’s tax day less than a month away, Attorney General Eric T. Schneiderman provided taxpayers with tips to help avoid fraudulent tax schemes. The Attorney General also urged New Yorkers to stay vigilant and report any suspected scams intended to steal personal and financial information from consumers to his office.
“One of my most important jobs is to help keep New Yorkers safe from scam artists,” said Attorney General Schneiderman. “With tax day around the corner, I wanted to share some tips to protect New Yorkers from being ripped off. If you suspect a scam, report it to my office.”
Each year, the Office of the Attorney General receives complaints from consumers about various tax-related schemes. The Attorney General’s Office continues to receive complaints about scammers who impersonate the U.S. Treasury Department, IRS, or other government officials and attempt to collect bogus tax debts. Fraudsters will pose as government officials via emails or phone calls, often using fake government logos in their email, or caller ID spoofing so that the victim’s caller ID box says “Internal Revenue Service” or displays the IRS’ actual phone number. Scammers threaten consumers with lawsuits, arrests, or deportation if they do not turn over money or provide sensitive personal information. A sample IRS scam call can be found here.
Consumers should be aware that, starting this year, debt collectors representing the IRS may call consumers to collect tax debts. However, the IRS will never do so without first sending the consumer a letter notifying the consumer that they will do so, and providing the consumer with information to help them determine that a call is legitimate. If a consumer gets such a call and has not already received this letter, the consumer should refuse to speak to the caller except to demand that another copy of the letter be sent. In many cases, the scammers claim consumers owe past tax debts and insist that consumers pay using a prepaid credit card or gift card. Many scammers insist on the use of these products because they are generally difficult to trace.
The IRS and legitimate government agencies will never demand payment by gift card, prepaid card, or certified check, or ask for credit or debit card numbers over the phone. Consumers should not pay over the phone, no matter how persuasive the caller. If a consumer has doubts about whether a collection call is legitimate – even if the consumer has received a letter from the IRS – they should call the IRS directly at 1-800-366-4484.
Taxpayers should also be wary of tax preparation businesses that advertise low fees to get customers in the door, but then increase the final fee by hundreds of dollars and claim the tax return was more complicated than anticipated. Be cautious of instances where a tax preparer electronically withdraws more than the agreed-upon fee without notice to the consumer.
Another scam that taxpayers should look out for involves the taxpayer receiving an unexpectedly large, and perhaps early, “tax refund” from the IRS. The scammer then calls the taxpayer, pretending to be an IRS employee, and demands that the taxpayer correct the “error” by repaying the money. The call may seem legitimate because the money was mailed or deposited by the IRS into the consumer’s account, but this “refund” actually belongs to another consumer whose identity has been stolen by the scammer. Consumers should not spend the money or “refund” any of it to a caller. Contact the IRS identity theft hotline directly at 800-908-4490 to report the scam.
In order to help New Yorkers avoid tax scams, Attorney General Schneiderman offers the following additional tips:
- If you owe money, you will receive a legitimate notice in writing that identifies the agency and the reason you owe money.
- Do not give out personal information to telephone callers – including your Social Security number, bank account information, or other payment information.
- Legitimate government organizations will never threaten lawsuits, arrest, or deportation for failure to pay a debt.
- Legitimate government agencies will never insist that consumers pay a debt only via a prepaid credit card.
The following suggestions will help consumers file their tax returns safely and keep more of their return:
- Only use established and recognizable companies for tax-preparation services.
- Check the tax preparer's qualifications and history through the Better Business Bureau.
- Ask for a written estimate of all fees. Avoid those who base their fees on a percentage of your refund.
- Avoid tax preparers that promise cash for preparing the return, but in fact merely offer a discount on inflated fees.
- Make sure the tax preparer is accessible, even after the April due date.
- Never sign a blank return.
- Review the entire return before signing.
- Make sure the preparer signs the tax form and includes a Preparer Tax Identification Number (PTIN).
- Consult New York's “Consumer Bill of Rights Regarding Tax Preparers.”
In addition to being vigilant consumers, New Yorkers should report potential scams to the Attorney General’s office by submitting a complaint online or calling the consumer hotline at 1-800-771-7755. Scams should also be reported to the U.S. Treasury Inspector General for Tax Administration at 1-800-366-4484.
Consumers can avoid the costs of refund anticipation loans and checks by filing their return electronically and having refunds either mailed or directly deposited into their own bank account.
The Attorney General reminds New Yorkers that there are Volunteer Income Tax Assistance (VITA) sites where consumers can get their tax returns prepared free of charge. For more information about how to qualify and identify a VITA location site, go to: https://www.irs.gov/individuals/free-tax-return-preparation-for-you-by-volunteers.
