How to Protect Yourself From Tax Scams in New York

How to Protect Yourself From Tax Scams in New York

Tax scams in New York are becoming increasingly prevalent, especially during tax season. It's crucial for residents to know how to identify and protect themselves from these fraudulent activities. Below are several strategies that can help safeguard your personal information and finances from tax scams.

1. Be Aware of Common Scams

Understanding the types of tax scams that exist is the first step in protecting yourself. Some of the most common scams include:

  • Phone calls from scammers pretending to be IRS agents, threatening you with arrest or legal action if you don’t pay your taxes immediately.
  • Email phishing schemes that ask you to verify your tax information or financial details through unofficial links.
  • Fraudulent tax preparers offering exaggerated refunds or asking for a percentage of your refund as a fee.

2. Use Secure Means for Communication

Always ensure that you are using secure methods of communication when discussing your tax details. Avoid sharing sensitive information over the phone or via email unless you are certain of the recipient’s identity. Utilize encrypted messaging apps or secure portals provided by your tax preparer.

3. Verify Tax Preparers

If you choose to hire a tax preparer, make sure to do thorough research. Check for credentials, reviews, and any disciplinary actions. The IRS has a directory of federal tax return preparers, which can help you find legitimate professionals in New York.

4. Protect Your Personal Information

Keeping your personal and financial information secure is crucial. Use strong, unique passwords for your financial accounts and change them regularly. Only share your Social Security number when absolutely necessary. Shred documents that contain sensitive information before disposal.

5. Report Suspicious Activity

If you receive suspicious calls or emails regarding your taxes, report them immediately to the IRS and the New York State Department of Taxation and Finance. You can also report these scams to the Federal Trade Commission (FTC) to help others avoid falling victim.

6. Monitor Your Credit

Regularly check your credit report for any unusual activity. Scammers sometimes use personal information to file fraudulent tax returns in your name. If you notice any discrepancies, report them immediately and consider placing a fraud alert on your credit file.

7. File Your Taxes Early

Filing your taxes as early as possible can help you beat potential scammers to it. If you file first, it becomes much harder for anyone to file a fraudulent return using your information. Ensure you keep all filing documents organized and secure.

8. Use Trusted Software and E-Filing Services

If you decide to do your taxes yourself, ensure that you are using reputable tax preparation software. Look for programs that have strong encryption security measures in place to protect your data.

In conclusion, being aware of potential tax scams and taking proactive steps to protect your personal information is essential for New Yorkers. By implementing these strategies, you can significantly reduce your risk of falling victim to tax fraud.