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How to avoid scams during tax season

It's always important to safeguard your personal and financial information, but during tax season, protecting your data is especially critical. With so much personal and financial information changing hands with tax preparation and filing, many fraudsters look for opportunities to steal taxpayers' information.

Some common scams include using taxpayer information to file fraudulent returns and get tax refunds in the names of victims. They also try to extort payment with false threats of IRS action due to outstanding tax bills or sell the information to other thieves.

In 2023, there were nearly 1.1 million potentially fraudulent tax returns according to a U.S. Department of Treasury report. The IRS continues to employ review processes to stop fraud, but you can reduce your chances of becoming a victim by taking a few precautions and proactive steps.

1. File your tax return as early as possible. The IRS began accepting tax returns on Jan. 29th, 2024. If you want to avoid fraud, it's a good idea to file your return as soon as you have the information you need to complete it. That's because if you've already filed your own return, a criminal will not be able to file a fraudulent return in your name. Two (or more) tax returns filed under the same name and with the same personal information would quickly signal a red flag for the IRS.

2. Don't provide personal information in response to a phone call. Criminals often impersonate IRS officials via phone, requesting that a victim make a payment over the phone or by sending a payment or prepaid gift card to a specific address. The IRS will never contact you by phone or email to ask for payment of an overdue tax bill. Instead, they will send a letter notifying you of an overdue tax bill. If someone calls and says they are from the IRS and they need money, ignore it.

3. Verify your tax preparer's credentials. Most tax preparers operate a year-round business and are legitimate professionals. However, some fraudsters pose as tax preparers. Those with insincere motives may pop up just for tax season, or they may not have references who can attest to their integrity and expertise. Before hiring a tax preparer, be sure to check their credentials.

4. Never click an email link for available tax documents. Some criminals will send phishing emails, which include bad links that could steal information from your computer or device. To avoid unintentionally becoming the victim of a phishing attack, never click an email link to a tax document. Even if the email appears to be from your own employer, go online and type in the URL for your employer's online W-2 or tax document retrieval service to access your documents.

If you suspect that you have been the victim or attempted victim of tax fraud, you should report it to the IRS.

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