It’s tax season and scams are on the rise. Each year, the IRS produces a list of its “Dirty Dozen” tax scams. These scams tend to spike from December through April, but they can, and do, happen year-round. Carolina Wealth Advisors of Janney Montgomery Scott in South Park, puts the spotlight on several of the “Dirty Dozen” that it feels may be most prevalent in 2024.
Phishing and Smishing
Fake communications from those posing as IRS agents arrive in unsolicited texts (smishing) or emails (phishing) to lure you into providing valuable personal and financial information that can lead to identity theft.
Schemes with International Elements
Those who place money overseas or hold digital assets, such as cryptocurrency, offshore have a good chance of getting on the IRS’s radar.
Bogus Tax Avoidance Strategies
Promoters pitch bogus tax strategies—for a high fee—that attempt to show taxpayers how to game the tax system with grossly inflated tax deductions.
In unscrupulous schemes, promoters abuse “syndicated conservation easements,” where appraisals are inflated, resulting in a higher deduction. Another scheme involves “micro-captive insurance arrangements” that often include implausible risks, failure to meet business needs, and unnecessary duplication of the taxpayer’s commercial coverages.
Fake Charities
Groups may masquerade as charitable organizations to attract donations from unsuspecting contributors—especially when a crisis or natural disaster strikes.
Fake charities often pose as familiar or nationally-known organizations using similar names. Use the IRS’s Tax Exempt Organization Search Tool at irs.gov to find qualified charities.
The Online Account Scam
In online account scams, a third party offers to help you set up an online IRS account to either steal your information to commit identity theft or to submit a tax return in your name and get a fraudulent refund.
How to Protect Yourself: Tips from Carolina Wealth Advisors
It is important to note that the IRS will never initiate contact with you by email, text messages or social media channels to request personal or financial information. If you question whether something is legitimate from the IRS, contact them directly or discuss it with your financial advisor. Never give out information, especially your Social Security Number, to someone claiming to represent the IRS.
Janney Montgomery Scott LLC. Member: NYSE, FINRA, SIPC. To contact: (704-367-4509)
Carolina Wealth Advisors is located at 4064 Colony Road, Suite #450, Charlotte, NC 28211
The concepts illustrated here have legal, accounting and tax implications. Neither Janney Montgomery Scott LLC nor its Financial Advisors give tax, legal, or accounting advice. Please consult with the appropriate professional for advice concerning your individual circumstances. For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.
