- Days left

Beware of Free Tax Preparation Scams

The latest tax scam offers free tax preparation ... and may steal your identity or infect your computerAs tax season heats up, there are several options available for free tax filing assistance for qualified taxpayers. Unfortunately, the numbers of taxpayers seeking free tax help have also created new opportunities for con artists and scammers.

This season, some taxpayers have reported offers of free tax assistance via email. The offers vary but generally ask you to provide certain information about yourself and/or your income in order to determine whether you qualify. The information requested is similar to the W-2 scam reported earlier by WalletPop.The requests for information or "offers" for assistance aren't always limited to the IRS. I recently received an email from a taxpayer who was surprised to receive an offer for free assistance from the Baltimore CASH Campaign. The taxpayer didn't request assistance, doesn't live in Baltimore (or Maryland, for that matter) and doesn't qualify for free assistance.

The Baltimore CASH Campaign is, in fact, real, and it does offer free tax assistance for qualifying families. However, it won't be soliciting you via email for appointments; rather, its website directs you to make an appointment by clicking online or calling the organization directly.

Similarly, the IRS does offer free tax assistance and may send you information about how to obtain tax assistance, assuming you've opted to receive updates via email. However, those updates aren't directed to individual taxpayers (think of them more like newsletters) and they will never ask you for financial information or personal details via email.

When you receive these kinds of emails, it's not always a question of mere phishing or identity theft. The emails may be from a spammer hoping to harvest addresses; when you reply to the sender to advise that there's been a mistake or to ask for further information, you're confirming that your email address is, in fact, valid. That makes it valuable to companies who sell email addresses to third parties. So, don't reply to the sender.

Even more dangerous, the emails may contain links with spyware, malware or viruses. In October, a scam email claiming to be from the IRS regarding EFTPS payments was actually part of a sophisticated effort to steal the data on your computer. Even though the links in the email appeared genuine (they did, in fact, eventually forward you to the EFTPS site), the links zipped their way through another site -- in the blink of an eye -- that installed spyware on your computer in order to intercept your online banking transaction data.

What's the best practice, then, to avoid tax scams?

If you receive emails from supporting organizations claiming to be affiliated with the IRS or offering you free tax advice, check out the organization. Don't reply with any personal, tax or financial information via email and don't open attachments or click on any links from organizations that you don't recognize. When in doubt, call the organization for more information before you take any action.

Finally, remember, the IRS will never initiate contact with you by email. If you get an email claiming to be from the IRS, don't reply. Don't open any of the attachments or click on any links. If you'd like the IRS to investigate it further, you can forward the e-mail to phishing@irs.gov. Then, you should simply delete it.


Increase your money and finance knowledge from home

Economics 101

Intro to economics. But fun.

View Course »

How to Avoid Financial Scams

Avoid getting duped by financial scams.

View Course »

TurboTax Articles

Top 6 Tax Tips for Sharing Economy Freelancers

It's never been easier to earn a few extra dollars: Whether you drive for a ride-share company like Uber, rent out a room through a rental service such as Airbnb, or work for a company like TaskRabbit that outsources small jobs, errands and tasks?being a freelancer in the sharing economy means you may have one or more micro-enterprises or small businesses going on. And, just as your full-time job does, these endeavors often result in tax obligations people often overlook.

Claiming Property Taxes on Your Tax Return

If you pay taxes on your personal property and owned real estate, they may be deductible from your federal income tax bill. Most state and local tax authorities calculate property taxes based on the value of the homes located within their areas, and some agencies also tax personal property. If you pay either type of property tax, claiming the tax deduction is a simple matter of itemizing your personal deductions on Schedule A of Form 1040.

Side-Giggers: Tax Tips for Side Jobs

Having a side gig can help you make ends meet or build your rainy day fund. Income from freelance work, running your own small business or working at a second job brings in extra income without requiring you to quit your day job. But, like your main source of income, a second job or side gig must be reported on Form 1040 at tax time.

Tax Aspects of Home Ownership: Selling a Home

Though most home-sale profit is now tax-free, there are still steps you can take to maximize the tax benefits of selling your home. Learn how to figure your gain, factoring in your basis, home improvements and more.

Add a Comment

*0 / 3000 Character Maximum