- 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

Understanding Credit Scores

Credit scores matter -- learn how to improve your score.

View Course »

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

TurboTax Articles

What Are the Tax Penalties for Smokers?

Starting in 2014, the Individual Shared Responsibility provision of the Affordable Care Act made you responsible for having minimum essential coverage, or MEC, in health insurance. Otherwise, you need to be eligible for a health care exemption, or you could pay a penalty when filing your income tax return. This requirement for minimum essential coverage applies to smokers and nonsmokers alike. If you're not covered by an employer's health plan and are a smoker, you can go to the health care marketplace to find MEC. If you're still unable to comply, you may have a penalty applied.

5 Steps to Navigate the Healthcare Marketplaces

To navigate the Health Insurance Marketplace, you have to know what you want from a health plan. Have your previous plan handy to make comparisons, as well as household and income information. If this is your first health plan, be aware of your needs and know your tax situation. Eligibility depends on the size of your family and combined income from all sources.

What Is Form 8941: Credit for Small Employer Health Insurance Premiums

Small business owners who subsidize the cost of employee health insurance premiums may be able to get some of that money back by claiming the credit for small employer health insurance premiums on their taxes. Some of the eligibility requirements, however, limit the number of people a business can employ and the average annual wages they earn. Qualifying as a small employer can reduce your tax bill by the amount of the credit you report on Form 8941.

What Is Form 8911: Alternative Fuel Vehicle Refueling Property Credit

In light of rising gasoline prices and environmental concerns, consumers have become more receptive to buying cars and trucks that run on types of fuel other than gasoline. The U.S. government introduced a tax incentive to encourage the installation of facilities to store or dispense alternative fuels in 1992. That incentive has evolved into a tax credit that also applies to equipment that recharges electric cars. If you equipped your home or business to accommodate alternative fuel vehicles, you may be able to use Form 8911: Alternative Fuel Vehicle Refueling Property Credit to reduce your federal tax obligation.

What Is Form 8885: Health Coverage Tax Credit

The health coverage tax credit is a program in place for tax years from 2002 to 2013 to help eligible individuals and families by paying a portion of premiums for qualified health insurance programs. Since the legislation authorizing the credit expired in January 2014, tax returns filed in 2014 for the 2013 tax year represent the last time eligible taxpayers can claim the credit.

Add a Comment

*0 / 3000 Character Maximum