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Tax Scams 2020: A Comprehensive Guide

tax scam guide

In 2018, the IRS had 649,000 confirmed cases of fraudulent tax returns from scammers trying to steal over $3 billion in tax refunds.

There are a lot of new and old ways being used to trick taxpayers and tax preparers alike. Like fake emails and phone calls, or even holding important documents they’ve stolen up for ransom. But the IRS is doing everything they can to protect taxpayer’s personal information and weed out scammers.

Protecting your information and important documents is the key to avoiding tax scams. Knowing a thing or two about what tax scammers are doing and how they’re doing it can also help you spot a scammer before you get taken advantage of.

Explore this Article

What are Tax Scams?

A tax scam is when someone uses tax season to steal private information. Many tax scams try and steal your personal information so they can file your taxes before you do, and claim your tax refund for themselves.

How to Tell if Something is a Scam

There’s not a worse feeling in the world than getting fooled by a scammer. Avoid letting this happen to you by first understanding what scammers want. They want to get you to pay for fraudulent services or they want your personal information. Second, learn to recognize the characteristics of a scam before it tricks you.

  • They will try and make you panic
  • They will try and get you to download something
  • They will try and get you to click on links
  • They will want you to pay in prepaid debit cards, gift cards, or wire transfers
  • They will demand immediate action and try to rush you
  • Their site won’t be secure
  • They will contact you in a way that the IRS won’t, like through emails, phone calls, or texts
  • Their promises will sound (and be) too good to be true

Common Tax Scams

The official website of the IRS is a great place to go for information and resources about tax scams. This year the IRS published a list of tax scams they call the “Dirty Dozen.” Here’s a brief recap of the tax scams you’ll want to look out for and what you should do if one of these tax scams hit you.

1. Berkheimer Tax Innovations Scam

Berkheimer Tax Administrator Services is an example of taxpayers receiving concerning letters in the mail about their taxes. They are one tax preparation company that has received a lot of flax for less than ideal business practices. Many of their customers have complained to the Better Business Bureau about receiving strange letters saying they owed delinquent taxes and asking for payment.

Be careful where you choose to file your taxes. When researching tax service providers you can always check their status on the Better Business Bureau’s website to make sure you aren’t falling prey to a scammy or fraudulent company.

2. IRS Tax Scam

Some tax scams will try and pretend they are the IRS in order to get you to pay them or give them information. This is also called phishing.

Phishing is when a tax scammer sends out emails or even creates a fake website to trick people into thinking they are the IRS. But the IRS directly states on their official website that they “will never initiate contact with taxpayers via email about a bill or tax refund.”

So if you receive an email claiming to be from the IRS, you can immediately know it’s a scam and report it. Do not click on any links or respond to any emails claiming to be from the IRS. By interacting with a fake email from the IRS you can jeopardize your computer and your personal information.

The IRS directly states on their official website that they will never do the following:

  • The IRS will not call you demanding immediate payment through a prepaid debit card, gift card, or wire transfer. If you do owe the IRS money, they will first mail you a bill, and you will never pay the IRS through prepaid debit cards, gift cards, or wire transfers. Scammers like to use these forms of payment because they are difficult to track.
  • The IRS will never threaten to have you arrested.
  • The IRS will never demand payment without allowing you to question or appeal what you owe.
  • The IRS will never ask you to give them your credit or debit card numbers over the phone.
  • The IRS will never suddenly call you about an unexpected refund for you.
3. Tax Evasion Scam

There are several forms of Tax evasion scams you should be aware of. These types of scams will try and sell programs to help you avoid paying taxes.

Offshore Tax Avoidance

One tax scam is to try and hide income offshore in order to avoid paying taxes on them. If you’ve been involved in any offshore tax avoidance, the best thing you can do is voluntarily catch up on your taxes to make things right.

Frivolous Tax Arguments

Some tax scammers will try convincing you to take part in frivolous tax arguments to try and avoid paying taxes. These cases are repeatedly thrown out in court, no matter what the tax scammer might say.

Abusive Tax Shelters

There are people who create complex tax avoidance schemes and then sell them to unsuspecting members of the public. Be aware that there are tax scammers like these, trying to peddle too-good-to-be-true schemes, plans, programs, or shelters.

4. Tax Fraud Scam

Other scammers will try and encourage taxpayers to fake information on their tax return in order to get certain benefits.

Return Preparer Fraud

Be careful when choosing a tax preparer or tax filing service. Make sure the website is secure and that the tax filing service is trustworthy and legitimate. Many scammers will try to pose as tax preparers to get ahold of your precious personal information and documents.

Find an established tax preparer you can trust, like Check City Tax Services, where you can file your taxes in a timely manner and know your documents and personal information are secure.

Inflated Refund Claims
Be careful if you are being promised an inflated tax refund, or if your tax preparer tries to get you to sign a blank return. When promises seem too good to be true, they often are. Trust this instinct and avoid scammers who will try and reel you in by promising larger than life tax refunds.

Falsifying Income to Claim Credits
Never trust a tax preparer that tries to convince you to falsify information on your tax record. All information on your tax return should be accurate. If someone tries to convince you otherwise, like that you received more income than you actually did, they are lying to you. Scams like these will lead you to pay large bills and penalties back to the IRS.

Falsely Padding Deductions on Returns
Again, all the information on your tax returns should be accurate. Do not inflate your deductions or expenses in order to pay less in taxes or get a larger tax refund. If your tax preparer is trying to work this way, then you should move your tax filing business elsewhere.

Fake Charities
Beware of fake charities. Sometimes you can recognize a fake charity because they will try and use similar names to well-known charities in order to confuse you. Donating to a worthy cause is a great thing to do, but not if you don’t take the time to double-check that the charity is real.

Excessive Claims for Business Credits
Be careful not to claim tax credits that you don’t actually qualify for. The fuel tax credit or the research credit are examples of tax credits you more than likely don’t actually qualify for. Make sure you fully understand each tax credit before trying to claim one.

5. Tax Scam Calls

You might receive a phone call from a person claiming to be an IRS agent. These fake IRS agents may even threaten you over the phone with legal action, police arrests, deportation, or license confiscation, but these threats are empty. They are only trying to make you think you are in trouble so that you panic and give them what they want.

If you receive a phone call from someone claiming to be an IRS agent and trying to do any of the following things, you can rest assured it is a scam and feel free to hang up and block that number.

6. Identity Theft

Some criminals will try and use the tax season to steal identities. One of the primary ways that someone can steal your identity is by getting their hands on your social security number or card. Then they can pretend to be you and try to claim your tax refund.

Keep your personal information safe by never revealing your social security number to anyone, and by keeping your social security card in a safe and secure location. It is also a good idea to memorize your social security number so that you don’t need to carry your card in your wallet where it’s more likely to get stolen.

How to Report a Scam

If you come across a Tax scam or fall prey to one, then you’re going to want to know how to report it.

First, fill out a 14039 form and send it into the IRS.

If you have any other questions about how to report any kind of tax scam you can find the information you need on the IRS website, Tax Scams – How to Report Them.

You can also visit the official website of the Office of the Inspector General (OIG) and Social Security Administration.

How Do I Know If I’ve Been Hacked?

One way to know if you’ve been hacked by a tax scammer is when you have trouble filing your taxes. Tax scammers often try and e-file your taxes before you do in order to snag your refund for themselves. You’ll then be unable to e-file your own taxes because the tax scammer already did it.

So if the IRS denies an e-file be wary, it could be a garden-variety error that you can go back and fix, but you should be able to successfully resubmit it if there was just a minor error.

 

Tax scams may seem scary but once you learn to recognize them, you’ll easily avoid being duped. Just be sure to protect your personal information and always be cautious in all your dealings. It’s always better to be overly safe than to wind up being sorry later.


How to Vote

how to vote

Voting doesn’t have to be a confusing hassle. If you have questions about how to vote in the upcoming election just take a look at the links below and find the quick answers you’re looking for:

Voting can seem complicated, especially if you just turned 18 and have never done it before. But it’s actually pretty simple! The upcoming election is also coming up faster than you might think. This coming February 3rd will be the first caucuses in Iowa, beginning the many caucuses, primaries, and conventions you’ll want to be a part of in order to participate in choosing the presidential candidates in the final election.

You need to prepare for the coming election now so that you’re prepared to vote in the primaries, and so you’re registered to vote in general. This way you aren’t taken by surprise when the final election rolls around and suddenly you have all these logistics to figure out. When it comes to voting, you also want to participate as early as possible so you can be informed and make your own educated choice.

Things to Know

There are a few general basics you’ll want to know about in order to understand elections and how they work.

Who can vote?

vote

In order to vote you must be at least 18 years old, be a citizen of the United States, and be registered to vote. But if you’d like to double check the specific voting requirements of your state you can visit Vote.org.

What are the different kinds of elections?

You probably already know about the presidential election, but did you know there are many more elections you can be a part of?

Federal Elections: these elections include anyone in the federal government. This would include the president, members of congress, senators, and members of the house of representatives.

State Elections: this includes voting for state legislatures, governors, the attorney general, secretary of state, state supreme court, and any other members of the state judiciary. State elections are also the time where you might vote on state policies.

Local Elections: this is where you vote on county and city government officials, like sheriffs, the mayor, and school board members.

The convention

One of the first things that happens during election season are conventions for each party. These conventions are generally held nationally. It is where political parties all gather together to browse the nominees for the coming presidential election.

The caucus

If you are registered to vote with a certain political party then you can go to that parties caucus. It is a meeting where people of a specific political party gather together. This can be where members of the party will register their preferences for who should be that party’s candidate. They also gather to discuss political policies pertinent to that group.

The primaries

The primary elections are often simply referred to as the primaries. They are the preliminary voting that takes place to decide who the final candidates for the final election will be. Many people try out to be presidential candidates, so this process helps voters choose the specific candidate they would like to represent their party in the final election. This narrows down the field so that when it comes time to vote for the actual president, there aren’t 30 or more people you have to know about and choose from on the voting ballot.

What is the electoral college?

We actually use the electoral college to determine the presidential winner in the end. Each state has a number of electors who cast these electoral votes. These electors consider the votes of the people from their states and use that information to cast their electoral vote. It’s these votes that determine who wins the presidency.

What’s the election schedule?

There are many events to be aware of during election season that take place the year before and after election year. Here is a general outline of all the most important election events you are going to want to be aware of.

The year BEFORE election year
Spring Candidates start announcing their intentions to run for president
Summer Primaries, caucus, and debates begin to take place
The year OF the election
July to September Political parties choose their candidates
September to October Presidential debates
November Election Day
December Electoral College votes
The year AFTER election year
January Congress counts the electoral votes
January 20th Inauguration Day

If you’d like to learn more about the basics of the presidential election, you can explore USA.gov to learn all about the voting and election process. This website even has educational videos and infographics to help you visually understand the process as well.

How Do I Vote?

register to vote

One of the biggest questions people have when it comes to elections is how to vote. Thankfully this process really isn’t too complicated either. Basically you’ll want to register to vote, participate in primary elections, stay informed, and vote at your polling place on election day.

First: how to register to vote

The very first thing you’ll want to do is get registered to vote. You register to vote in your state of residency so that when you do vote, you’ll be a part of your state’s voting pool. Registering to vote is incredibly easy to do. You can do it in person or online.

Where can I register to vote in person?

  • The DMV
  • Armed forces recruitment center
  • State and county public assistance offices

You can also quickly register online at Vote.gov. You can also check your registration status on this website to check if you’re already registered to vote.

You can also register by mail, if you are out of the country or out of your home state. All you have to do is fill out the National Mail Voter Registration Form found on USA.gov and then mail it to the address listed for you state.

Second: how to participate in the primaries

The candidates that will represent each party in the final vote needs to be chosen. Before election day arrives there will be primaries, caucuses, and political conventions to help narrow down the candidates. Different parties and states will do these preliminary voting events in varying ways.

If you want to vote in the primaries to help pick the final presidential candidates, then read, “When are the 2020 presidential election primaries?” to see when your state will hold their primaries. Then all you have to do is go to the primaries and participate in the preliminary voting so you can be a part of picking the final candidates.

During this time candidates will be narrowed down to the final few. They will also announce who their vice president would be, and then they go across the country campaigning, talking about their views and plans, and debating with other candidates until election day arrives. You can also help out your candidate of choice by volunteering or fundraising for their campaign!

Third: how to vote on election day

By participating in election events now, you can do your own research and watch debates to learn about the different presidential options, what they are all about, and what their presidential plans are. Then all that is left to do is go to your local, designated polling station on election day and cast your vote.

Election Day is always on the Tuesday after the first Monday in November. This upcoming election day will be on Tuesday, November 3, 2020.

The only way you can cast your ballot is in person, or by mail. There is no way to vote online, so when election day comes you’ll need to be prepared to physically go to the polls, or be prepared ahead of time to mail in your ballot.

To find your polling place type in your address at VotingInfoProject.org to see where you’re designated polling station is.

If you are going to be absent from your registered state, or need to vote by mail for any other reason, then you’ll need to use the website for you state to find out how they want you to cast your absentee ballot.

What do I need to bring to vote?

polling station

The only thing you may need to bring with you to the polls is a form of identification. Whether ID is required for you to vote or note will depend on your state. You can check your state’s requirements for what to bring with you to the polling station by visiting NCSL.org.

How to Vote Early

There are many things that can make voting on election day difficult. But don’t let finances be one of them. If you need some financial help to get to the polls just take out an easy to use personal loan from Check City.

Whatever your reason, if you need to vote earlier than election day, it will depend on your state and whether they allow early voting. States usually have specified early voting dates.

Generally you don’t have to give them an excuse as to why you need to vote early, but this also might depend on your state.

The best way to see what you’ll need to do to vote early in your state is to find your state’s official website. You can do this by choosing your state at USA.gov and they’ll bring up your state’s official website. This site will then have your state’s specific information about early voting.

How to Vote in Midterm Elections

Midterm elections, or congressional elections, occur every 2 years. They happen in between presidential elections. They include voting for members of congress, the house of representatives, and the senate. These elections don’t use the electoral college but instead use the popular vote. The last midterm elections occurred November 6, 2018. If you want to participate in the next congressional elections just visit USA.gov for more information on when they are and how to vote in them.

How to Vote in Local Elections

The presidential election isn’t the only election you should be involved in, there are local elections going on all around too. These elections are equally important as the people put into office and the policies that get decided are all things that will affect your immediate community. Don’t just deal with whatever happens, be a part of shaping your community.

You can either use USA.gov or USVoteFoundation.org to see what local and state elections are coming up in your area.

 
Voting is an important part of being an active member of society. Your voice matters and voting is one way to make your voice heard. Don’t let misconceptions about voting keep you from getting to the polls and doing your part to help our society and grow.

Re Evaluating Budgets after Fiscal Cliff

With the fiscal cliff deal passed, nearly everybody will be paying more in taxes every year. The amount varies based on your yearly salary. Everyone will have to adjust their budgets a bit to make ends meet smoothly again. Here are a few ideas of ways to spend less on the things you would normally buy or remove certain expenses that are not as necessary.

Reduce Total Energy Consumption

We often use more energy than we need to by carelessly throwing it away. During the winter, turn your heater down to 60 degrees—warm enough to make the house bearable, but not enough to burn through energy. Turn down your water heater to 120 degrees, you don’t need it to be hotter than this and you’ll waste less energy heating water to temperatures you would never want them at. After cooking a meal in the oven, open the oven door to let the heat escape into the house, keeping it at a warmer temperature for longer. These are just a few ideas to begin with, but there are many more ways to conserve your energy.

Remove Land-line or Cable Subscription

Most families have a cell phone anyways. To have a land-line is just an added expense. If you use your cable subscription just to watch sitcoms, cancel that subscription and hook your computer up to your TV. Most TV shows are easily found on the internet a day later. Wait a day and then use your internet connection to watch everything you would watch normally.

These are just a couple ideas of things you can do to cut your monthly spending. These ideas are meant to get the ball rolling. Think about the things you don’t really need, and then think about the things that can be reduced through creative innovation.

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