Doing your taxes is taxing enough, without having to worry about getting scammed in the process.
But it can happen. From illegal tax preparers to online money scams to bogus IRS emails, con artists are always trying to trip us up.
With two weeks until the April 15 tax-filing deadline, consumers are reminded to be on the lookout for tax-related rip-offs.
"The beauty of a tax scam is that everybody over 18 who has a job is involved with the IRS at some level," said Robert Siciliano, a Boston-based online security expert for McAfee.
That makes it easy for scammers to get your attention at tax time, whether it's by mail, email, phone or even a neighborhood storefront.
In fact, the IRS recently issued its "Dirty Dozen," a list of its top tax scams, some of which are perpetrated by taxpayers themselves. (See the list at www.irs.gov.)
Here's a roundup of some of the worst offenders and the best defenses:
Bad tax preparers
Most tax preparers are honest and reputable, but rogue operators prey on unsuspecting consumers.
It's especially a problem during the last-minute rush to file tax returns, said Gigi Campo, spokeswoman for the nonprofit California Tax Education Council, or CTEC, in Sacramento. "Many questionable tax preparers use this time to take advantage of stressed out and distracted taxpayers."
They claim false deductions to fraudulently plump up your tax refund, then charge a percentage. Or they insist on upfront fees. Or they simply do shoddy work, leaving the taxpayer on the hook for their errors. (Even if unaware of the fraud, taxpayers are liable for penalties and interest.)
In recent years, both the IRS and state Franchise Tax Board have cracked down on fraudulent preparers, especially those who aren't properly licensed. In 2005, the FTB estimated there were 10,000 to 20,000 California tax preparers operating illegally (including lawyers, CPAs and enrolled agents); today, that estimate has dropped dramatically, to between 4,000 and 5,000.
"While the majority of tax preparers are honest professionals, who take pride in their work, as with anyone you hire, check their credentials," said FTB spokesman John Barrett in an email.
Avoid getting scammed
Make sure all fees are clear and disclosed upfront; Never sign a blank return; Be sure the tax preparer signs your return; Ask for his/her Preparer Tax Identification Number (PTIN), which is now required by the IRS of anyone who prepares taxes.
By law, the PTIN must be included on your tax return, along with the preparer's signature.
"If they tell you it's not necessary, report them immediately to the FTB or CTEC," Campo said.
Typically, these scams start in November or December, when consumers are making end-of-year tax donations to charitable groups. Using phony names that sound like a legitimate charity, fraudsters solicit you for donations, which they ask to be sent via Western Union, MoneyGram or wire transfers.
This time of year, wire-transfer fraud shifts to luring consumers into paying upfront fees for tax preparation, quick tax refunds, IRS debt settlements or other tax-related services.
"Be leery. Don't send money to someone you really don't know," said Kim Garner, senior vice president of global security for MoneyGram in Dallas.
"Anytime they ask for upfront fees (to settle IRS debts, prepare your taxes or get you a bigger refund), it's a red flag," said Garner, a former Secret Service agent.
Too-good tax refunds
Want a "guaranteed" tax refund? A bigger refund than anyone else is advertising?
Tax refund scams are an ongoing problem, promised by unscrupulous tax preparers who advertise on websites, emails, fliers and from storefront windows.
"We always tell people: No tax preparer can 'guarantee' you a refund without looking at your tax information," Campo said.
Her advice: Steer away from tax preparers who promise a bigger refund than competitors. Or one who charges based on a percentage of your refund.
"If something sounds too good to be true in the way of a tax refund, it probably is," said MoneyGram's Garner. "Don't hesitate to reach out to the IRS or the Better Business Bureau to report it."
They take many disguises, but online attempts to steal your money or infect your computer are rampant. Leading up to April 15, they often arrive as phony emails from the IRS or from pseudo tax preparers. The subject lines are deceptive and often enticing enough to click open: "Tax Relief Notification," "Important Tax Deadline," "Your Tax Return Appeal is Denied."
Even though we think we're immune to getting suckered in, it can happen, especially when money and taxes are on our minds.
"There always are brand new and brilliant twists to old scams," said McAfee's Siciliano, who says consumers may be caught off-guard. "A scam I might have seen a hundred times. All of a sudden, something resonates with me and bam, I'm hooked."
The online phishing attempts have nefarious goals: Some want to trick you into typing in your private financial information, such as bank account, credit card or Social Security numbers, in order to drain an account or open phony new ones in your name. Others want to install malware on your computer, which is then commandeered to unleash viruses, spam and other attacks elsewhere.
If filing your own taxes online, "Make sure the device you're using is secure," Siciliano said. On a PC, your operating system should be Windows 7 or 8. Your browser should have the latest anti-virus, anti-spyware installed. Install the latest security patches. And, he added, "Be sure you ask how much your tax preparer has installed them, as well.
Never file your taxes using a wireless Internet connection, such as at an airport or local cafe. "Use your own home computer. Don't use one at work," Siciliano said. "If it's not encrypted, anyone with the right software can sniff out your (financial information) in a free wireless environment."
Words to the wise
It may not be comforting, but the need to be on fraud alert at tax time – or any time – is a reality.
"There isn't a moment of the day that someone isn't trying to pick your pocket, via email, telephone, a website or a letter in the mail," Siciliano said. To avoid those headaches, "You have to up your 'scam intelligence.' "
Call The Bee's Claudia Buck, (916) 321-1968. Read her Personal Finance blog, www.sacbee.com/personalfinanceblog.
This story was changed April 1 to correct Kim Garner's title.