Beware of this Tax Preparation Scam

Monday, January 10, 2022

tax preparation scamIt’s tax time! Unfortunately, there are thousands of scammers looking to steal your information and your tax refund by posing as tax preparers. Here’s all you need to know about these scams and how to keep safe.

How the Scam Plays Out

In a tax filing scam, a victim will hire an alleged tax preparer to do their taxes. The scammer then uses the victim’s information to file a tax return in the victim’s name. They will change some important details on the tax form, such as a checking account number or mailing address. Swapping in their own information allows the scammer to collect the victim’s refund. By the time the victim realizes what happened, they’ve lost their refund money and are now vulnerable to identity theft.

Protect Yourself

The best way to avoid a tax filing scam is to do your research carefully before hiring a tax preparer.

First, avoid pop-up ads when choosing a tax preparer, especially those that are riddled with typos. Research any preparers you consider hiring. Ask for references of previous clients and look for a physical address on their website. Be suspicious, as well, if they promise a large return without knowing anything about your finances.

Second, before hiring an individual or agency to do your taxes, ask to see their Preparer Tax Identification Number (PTIN). If they refuse to share their PTIN, you’re being scammed.

Finally, if you’ve already hired a preparer but you’re suspicious about their authenticity, look for these red flags:

  • The preparer inflates numbers that affect your tax liability.
  • The preparer claims ineligible individuals as your dependents.
  • The preparer asks you to sign a blank form and promises to fill out the remainder after you sign.
  • The preparer refuses to sign your form.

If your tax preparer follows any of the above practices, terminate your relationship with them immediately.

If You’ve Been Targeted

If you’ve been targeted by a tax filing scam, report it to the authorities as quickly as possible. Let the FTC know about the scam and alert the IRS.

If you’ve shared personal information with the scammer, you are now vulnerable to identity theft. Check out the federal government’s page on identity theft recovery to learn what steps to take next.

McCoy Federal Credit Union works with members to keep their financial information safe. Members with a Smarter, Smart or Fresh Start Checking Account have access to a wealth of services through NXG Protect. This includes alerts of critical transactions/suspicious activity, credit monitoring, access to an identity theft advocate and more. McCoy is committed to protecting your identity with the same care taken every day to meet your banking needs.

McCoy FCU 1/10/2022