Consumer advice: Don’t fall for these tax scams
This tax season, scammers will be working overtime to steal your identify and money. Here are a few common scams to watch for.
1. Tax-refund fraud: This is when the crooks electronically file a false return under your name and claim a low income and high deductions, then pocket the refund. When you file your legitimate return, it’s rejected by the IRS because somebody has already filed as you. Some states are starting to require identity protection PINs — six-digit numbers used on a tax return to verify the taxpayer’s identity — but Idaho has not yet adopted this security measure.
2. W-2 email phishing scam: There’s a new twist to this scam, which results in scammers tricking major companies into turning over copies of W-2 forms for all employees. The criminal pretends to be the CEO or supervisor and asks payroll or human resources for sensitive W-2 data. The criminals then use the information to file bogus tax returns or sell the data on the dark web to other criminals, according to the IRS.
3. Make sure tax preparers sign off on your return: This is a new scam that involves tax preparers who don’t sign off when they prepare your tax return for a fee. Tax preparers must sign and include their valid preparer tax ID, and if they don’t, they’re breaking the law. They should also not ask for cash payment without providing a receipt, falsify income information to get tax credits, make fake deductions, taking a percentage of your refund as payment or having a client’s direct deposit refund sent to their own bank account.
4. IRS phone scams: Usually this scam involves a surprise tax bill that must be paid immediately to the IRS or you will be arrested. The crook can spoof the number to make it look like the call is coming from the IRS. Because they have the last four digits of your Social Security number, this gives them more credibility. But watch for the use of common names and fake IRS badge numbers. They could follow up with a bogus email that appears to be from the IRS. You’re told to pay either by wire or prepaid debit card. But the IRS will never contact you by phone asking for money. They communicate exclusively through snail mail.
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CORONAVIRUS TRAVEL RESTRICTIONS: With increased concerns over the coronavirus, many readers wonder why there’s not more being done to prohibit travel to some countries. The U.S. Department of State issues travel advisories and warnings regarding which countries might not be safe for U.S. citizens to visit.
There are four advisory levels from low to high regarding safety and security risk: They are: Level 1: Blue — exercise normal precautions; Level 2: Yellow — exercise increased caution; Level 3: Orange — reconsider travel; and Level 4: Red — do not travel.
There are about 17 countries that U.S. citizens are not allowed to travel to because they’re at a Level 4 advisory warning. Of those warnings, most are due to terrorist and kidnapping risks to American citizens. Only three are because of the coronavirus.
On Jan. 30, the World Health Organization declared the coronavirus outbreak to be a global public health emergency. On Feb. 2, the State Department issued a Level 4 warning on all of China. On Feb. 11, Level 2 advisories were issued on Macau and Hong Kong. However, those are Level 2 advisories, warning of increased caution.
While the Department of State has issued a Level 4 Do Not Travel advisory to China, the U.S. Centers for Disease Control and Prevention has issued a Level 3 warning, which is avoid all nonessential travel to China. At this time, none of the countries around China have a warning issued, including Vietnam, a Level 1 or exercise normal precautions.
Keep in mind that these types of advisories can change with very little notice, so if you’re planning international travel in the near future, check out the State Department’s website: https://bit.ly/328w3nf
SECURITY ACT, CLARIFIED: A couple of readers asked me to make two clarifications to the SECURE Act I wrote about last week.
1. The 10-year balance draw down for inherited IRAs and 401(k) plans is for non-spouses. Spouses can continue to draw the account down over their lifetime.
2. There is a provision in the Act that reinstated (and did it retroactively for 2017 and 2018) the deduction for Private Mortgage Insurance. If you paid PMI in 2017 and/or 2018, check with your tax preparer to determine if filing an amended tax return for those years makes sense.
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SHIPMENT ALERT FAKE TEXTS: Scammers are contacting us via text message to inform us that our shipment is coming. This is a ruse to get us to click on the link. I received a message the other day and it said the sender was Amazon. I knew it was a hoax because I have no outstanding orders with Amazon.
Don’t click on these links. Instead, go to your account directly to see the status of your order.
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Remember: I’m on your side.
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If you have encountered a consumer issue that you have questions about or think our readers should know about, please send me an email at terridickersonadvocate@gmail.com or call me at 208-274-4458. As The CDA Press Consumer Gal, I’m here to help. I’m a full-time copywriter working with businesses on marketing strategy, a columnist and a consumer advocate living in Coeur d’Alene.