Tax season is one of the busiest seasons for fraudsters and criminals who prey on the taxpayers who dutifully file their taxes. Despite the efforts that are made by both the IRS and savvy taxpayers, tax scams will still occur. So, victims must take a proactive role in clearing their names.
If you are the victim of a tax scam or a tax fraud, the best way to clear your name is to report the scams and use the IRS's processes to resolve these issues.
Report suspected tax scams
The first step in clearing your name with the IRS is recognizing if you're victim of a tax scam and understanding the nature of the fraud that has occurred. The top tax scams fall loosely into three main categories:
- Internet-based scams: The IRS warns that it will never email you to ask for personal information. If you receive an email claiming to be from the IRS, it is probably a common Internet scam called phishing. Report these tax scams by forwarding the email in question to the IRS at email@example.com.
- Phone scams: Another criminal tactic is to impersonate the IRS and make threatening phone calls. Recently, some criminal callers have been falsely claiming to be verifying tax return information and asking for sensitive details such as Social Security numbers or credit card numbers over the phone.
- Preparer fraud: Tax-preparer fraud is also a common tax scam that occurs because so many taxpayers rely on others to file their taxes. IRS Commissioner John Koskinen has warned that although most tax professionals provide good service, there are always a few who steal from their clients or compromise tax returns in ways that can severely harm taxpayers.
If you suspect fraudulent activity by a tax return preparer, the IRS advises you to complete Form 14157 online or mail it to the IRS address. And if you think a tax return preparer filed or altered your return without your consent and you're seeking a change to your account, you should use Forms 14157 and 14157-A.
Additionally, with Internet-based and phone scams, depending on the nature of the information requested and its method of delivery, you might need to involve either the U.S. Securities and Exchange Commission (SEC) or the Federal Trade Commission (FTC). If the tax fraud has led to a financial loss, the IRS suggests starting with the Treasury Inspector General Administration, as well as filing a complaint with the FTC to aid investigators in pursuing the guilty parties. The SEC gets involved when the fraud involves stock or share purchases.
Be proactive in fighting back against tax scams
As with any type of fraud or scam, the most dangerous thing you can do as a victim of a tax scam is remain quiet. Unfortunately, it is common for tax scam victims to say nothing and hope that the problem will simply go away. But staying silent robs you of the ability to proactively involve the IRS. Reporting and getting ahead of the problem, once you discover it, is a good way to protect yourself from a tax scam.
Once you have identified the issue you are facing and have reported the matter to the appropriate agencies, it is important to stay on top of your claim. The IRS and the FTC each have measures in place to combat tax scams, but it is up to you to make sure that your case works its way through the system and that you meet their deadlines.
Escalate your claims when needed
The IRS acknowledges that it does not always handle issues as seamlessly as it should. For this reason, the IRS created the Taxpayer Advocate Service (TAS), a group that ensures taxpayers are treated fairly and know and understand their rights.
The IRS suggests contacting the TAS when:
- The tax issue you are trying to work through is creating financial problems for you, your family, or your business.
- You or your business are facing an immediate threat of adverse action, such as utility cutoffs or eviction.
- After multiple attempts to contact the IRS, you have either not heard anything in reply or an IRS-imposed deadline for responding has passed without any further communication.
The TAS is an independent organization within the IRS and operates with the sole purpose of helping taxpayers resolve their tax issues. Also, every state has at least one local Taxpayer Advocate that you can contact for help. These advocates report directly to the National Taxpayer Advocate and operate independently of the local IRS office; they serve as a point of escalation if you are having trouble getting your tax problem addressed and resolved.
If you have been a victim of tax fraud or a tax scam and need to clear your name with the IRS, address the problem right away. The IRS and TAS provide a variety of resources to help you identify potential threats before they occur and combat them once they happen. You might need to file a complaint with multiple agencies, but given the complexities involved, the TAS is there to help if your initial efforts do not resolve your tax scam problem.
This article originally appeared at GoBankingRates.