The Internal Revenue Service continues to observe criminals using a variety of scams that target honest taxpayers. In some cases, these scams will trick taxpayers into doing something illegal or that ultimately causes them financial harm.
These scammers may cause otherwise honest people to do things they don’t realize are illegal or prey on their good will to steal their money, according to the IRS.
Fake charities
Taxpayers should be on the lookout for scammers who set up fake organizations to take advantage of the public’s generosity.
Scammers take advantage of tragedies and disasters.
Scams requesting donations for disaster relief efforts are especially common over the phone.
Taxpayers should always check out a charity before they donate, and they should not feel pressured to give immediately.
Taxpayers who give money or goods to a charity may be able to claim a deduction on their federal tax return by reducing the amount of their taxable income.
However, to receive a deduction, taxpayers must donate to a qualified charity.
To check the status of a charity, they can use the IRS Tax Exempt Organization Search tool. It’s also important for taxpayers to remember that they can’t deduct gifts to individuals or to political organizations and candidates.
Tips to recognize scams
Individuals should never let any caller pressure them. A legitimate charity will be happy to get a donation at any time, so there’s no rush. Donors are encouraged to take time to do their own research.
Confirm the charity is real. Potential donors should ask the fundraiser for the charity’s exact name, website and mailing address, so they can confirm it later. Some dishonest telemarketers use names that sound like well-known charities to confuse people.
Be careful about how a donation is made. Taxpayers shouldn’t work with charities that ask for donations by giving numbers from a gift card or by wiring money. That’s a scam.
That’s a scam.
It’s safest to pay by credit card or check—and only after researching the charity.
For more information about fake charities see the Federal Trade Commission web site (www.ftc.gov).
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