It’s that time of year again – tax season, which could also be known as scam season. Consumers aren’t the only targets scammers are aiming for this tax season. They love businesses too; old or new, big or small, they’ll take them all. Scammers do not discriminate. That’s why Better Business Bureau Serving Eastern Michigan and the Upper Peninsula are urging you to take caution this tax season.
“It’s a harsh reality to think that con artists could be targeting your business,” said Melanie Duquesnel, President and CEO of BBB Serving Eastern Michigan. “We often do what we can to protect ourselves, personally, but we sometimes forget that our businesses could also be a target.”
Here are five of the most popular schemes to look out for this tax season.
If your business receives an aggressive phone call from someone claiming to be with the IRS, it’s likely a scam. These callers use scare tactics such as an arrest, deportation or license revocation if you don’t pay them for the “debt” they claim you have. Scammers ask you to send them money via a prepaid debit card or wire transfer, and many people pay out of fear. BBB advises you to hang up. The IRS and other government agencies won’t call you to collect money or ask you to make a payment via a prepaid card or wire transfer. The IRS often uses U.S. mail as a first contact.
If your business receives an unsolicited email that appears to be from the IRS, it may be a phishing scam. In these scams, victims receive an email that appears to be from the IRS and are informed that they owe money, or are entitled to a refund. The email will claim that you need to verify your personal information, usually sensitive data such as your Social Security number or credit card number. However, links in the email can take you to a site that downloads malware on your computer to search for your sensitive data. BBB advises you to never open emails or click on links from sources you don’t know. Keep in mind that legitimate businesses such as the IRS won’t ask you to confirm your personal information through email.
Identity theft doesn’t just happen to consumers. Businesses of all sizes are targets as well. Thieves can use your business’ identity and file a fraudulent tax return. According to QuickBooks, sole proprietors have the most to lose since their Social Security numbers are tied to their business. To reduce your risk of identity theft, protect your vital information such as Social Security and employer ID numbers. Also, monitor your credit reports often to identify any suspicious activity.
Many business owners make a last-minute charitable donation to reduce their tax liability, one of the many reasons to be extra cautious of scams this time of year. Always do your own research regarding reputable charities. Watch out for name confusion. Many phony charities mimic the names of well-known and respected organizations, hoping to fool you into donating.
Check out the charity with BBB Wise Giving Alliance (Give.org) who has charity reports on more than 11,000 charities in the U.S. and Canada.
Some tax preparers are persuading people to falsify their income to receive tax credits they aren’t really due. The IRS says altering your self-employment income could have serious repercussions, including repayment of the erroneous refund with interest and penalties, and in some cases, criminal prosecution. Never falsify information on your taxes, no matter who suggests it.
Preparing your taxes can be a daunting task. Don’t know where to find that credible, ethical tax preparer? Visit bbb.org/Detroit. We can help.