Watch for scams this year while filing your income taxes

It takes only a syllable to describe the money victims are losing this year through tax scams.

“Wow,” is the one IRS spokesman Mark Green chose, adding, “I’ve seen more scams, more identity thefts, more situations where people have lost a lot of money. ... This has been the worst year ever.”

The estimates as of February were $29 million lost nationwide and at least $700,000 in Georgia, said Green, noting those figures no doubt have increased since and were conservative to start with, because some people are too embarrassed to report they’ve been scammed.

But they should report it, because they ultimately are responsible for any taxes they owe, and the IRS can’t help them if they don’t file a report that prompts an investigation.

Such investigations here in Columbus and Phenix City have yielded shocking results that repeatedly made news headlines. Consider this report from Jan. 16:

A federal judge sentenced a Phenix City woman to 51 months in prison for filing 326 fraudulent tax returns seeking more than $450,000 in refunds. Investigators said she was the codefendant of a woman involved in a $24 million scheme to steal victims’ identities for filing fraudulent tax returns. The codefendant was sentenced to 15 years in federal prison.

Those cases involved the breach of a state database from which the scammers stole personal information for filing the false returns. Often such schemes are not so sophisticated, involving only a private tax-preparation business that either knowingly scammed customers or employed a worker who surreptitiously took advantage of clients.

While acknowledging many taxpayers using such services already have longstanding relationships with tax-preparers they trust, Green warns those shopping around to be extra careful — to protect their personal financial data with the same care they would their health information while choosing a doctor.

The IRS maintains a ZIP-code searchable database of vetted tax-preparers online at irs.treasury.gov/rpo/rpo.jsf. “These are folks who have registered with us,” Green said. “They have qualified, and taken tests.”

Taxpayers competent in computer use should be able to file their own taxes now with no middleman, he said. Along with widely available commercial software, programs available online at irs.gov practically do all the work. “It doesn’t allow you to make mistakes,” Green said of such software. Type in the wrong Social Security number, for example, and the program won’t accept it, he said.

Those who make less than $62,000 annually can file their taxes electronically for free through the agency’s “Free File” service online.

The more computer savvy can download an app that files the return using a photograph of their W-2 form. “If you’ve got a smart phone, you can do it,” Green said. The phone will scan a bar code on the W-2 and take it from there.

Electronic filing is eclipsing the old paper forms folks used to rush to the post office to get postmarked by the deadline: Of the 4.7 million Georgians filing income taxes this year, 4.1 million are expected to do it electronically.

This year taxpayers will get a break on the income-tax deadline, which will be Monday, April 18, rather than Friday, April 15. That’s because Washington, D.C., will observe “Emancipation Day” that Friday.

The holiday, which would be marked April 16 were that a weekday, commemorates President Abraham Lincoln’s signing the Compensated Emancipation Act in 1862. The act freed about 3,000 slaves in the nation’s capital while compensating their owners.

Green urges procrastinators to take advantage of the extended deadline to file their returns, even if they can’t afford to pay right away. Filing the return ensures they’ll be charged no interest or penalties, and they later can set up a payment plan with the IRS when it mails them notification of their unpaid balance.

“The most important thing you want to do is file the return,” Green said. The rest you can take care of later.

He noted also that because of the egregious tax scams so prevalent now, the agency is more vigilant about inspecting tax filings to flag possible identity thefts. In suspicious cases, the taxpayer gets a mailed notice called a 5017C, warning that more information is needed to confirm the filer’s identity.

Some of those receiving these have been traveling to IRS offices and waiting in line to verify their status, Green said. This is not necessary, as a visit to the IRS website link idverify.irs.gov or a telephone call is usually all that’s needed.

But the latter means a telephone call from the taxpayer to the IRS, not the other way around, he warned. Some scams are predicated on victims’ believing someone from the IRS called to get their personal information, sometimes with the threat they face consequences if they don’t comply. The IRS doesn’t make unsolicited telephone calls or send texts or emails seeking sensitive data, Green said. It uses the U.S. Postal Service.

Business owners need to remember that, too, he said, because some employers have fallen for bogus IRS requests to see all their workers’ W-2 forms, and naively complied.

This story was originally published April 6, 2016 at 5:08 PM with the headline "Watch for scams this year while filing your income taxes."