Each year the IRS compiles a list of the worst tax scams of the year. It is intended to educate and warn taxpayers of scams to avoid.
Each year the scammers get a little more creative in their attempts, and it is important to be vigilant. Though the IRS and Department of Justice work feverishly to shut these down, the scams often intensify around tax filing season.
Last week the IRS warned taxpayers to avoid individuals disguised as charitable organizations soliciting donations.
"Fake charities set up by scam artists to steal your money or personal information are a recurring problem," said IRS Commissioner John Koskinen. "Taxpayers should take the time to research organizations before giving their hard-earned money.”
Some tips to help avoid scammers in making charitable donations include:
- Verifying the legitimacy of the charitable organization you’re considering contributing to. Scammers get creative with names that sound legitimate or similar to charities you know and trust. The IRS has a search option to find legitimate charities and make sure your donation is used for its intended purpose. Simply visit irs.gov, select charities and non-profits, then select EO Select Check. This will allow you to input the EIN (Employer Identification Number) of the charity in question and verify their legitimacy.
- Avoid providing personal information when making charitable contributions. Scammers will ask for your personal information, such as your social security number, credit card number, etc. This will lead to identity theft and stolen funds at a minimum.
- Don’t provide credit card information over the phone, when possible, and verify the person you are speaking to over the phone is calling from a legitimate charity.
- Avoid sending cash. For tax documentation purposes and your protection, avoid sending cash to organizations and individuals.
In addition to tax filing season, fake charities often appear shortly after a natural disaster, preying on those who genuinely want to help.
If you have any additional questions about donating to a charity, contact a CPA at Cook Martin Poulson, PC.