Don’t be a victim of tax fraud: Tips for filing

For tax scammers, tax season equals ill-gotten profits. Tax refund fraud victims usually first learn of the crime after having their returns rejected because scammers beat them to it. 

Here is what you can do when you’re ready to file to avoid becoming a tax fraud victim:

  • File before the fraudsters do it for you. Your primary defense against becoming the next victim is to file your taxes at the state and federal level as quickly as possible.
  • Get an IRS IP PIN. Michigan residents are now eligible for the IRS Identity Protection Personal Identification Number (IP PIN) Opt-In Program. An IP PIN is a six-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number on fraudulent federal income tax returns. It helps the IRS verify a taxpayer’s identity and accept their electronic or paper tax return.
  • Use a credible tax preparer. You should beware of tax preparation firms that claim they can obtain larger refunds than other preparers, base their fee on a percentage of the amount of the refund, ask consumers to sign a blank tax form, refuse to provide a preparer tax identification number or provide copies of your tax returns, or charge outrageous fees. Anyone can file their taxes for free using IRS’s Free File Software or Free File Fillable Forms.
  • Watch out for tax-related companies. Some legitimate-looking companies claim to be able to “free” consumers from tax liens, wage garnishments, levies and “unbearable monthly payments” for huge upfront fees. Other companies claim to be able to settle debts to the IRS for pennies on the dollar, and yet others will claim to give you an advance on your refund but will never hand over the balance of the money. Instead of paying big upfront fees to shady firms, consumers having trouble paying taxes should contact the IRS or their state comptroller. The IRS’s Taxpayer Advocate Service is an independent office within the IRS that provides free help to consumers having trouble paying their federal taxes. Consumers experiencing difficulties paying state taxes should contact the National Association of State Auditors, Comptrollers and Treasurers for guidance.
  • Don’t use insecure Wi-Fi. Skip using the Wi-Fi at a coffee spot, hotel or fast food location to file tax returns online. These locations are prime places for hackers to intercept and steal your personal information.
  • Use direct deposit for refunds. Get your refund via direct deposit rather than by check so criminals can’t redirect it to their address or steal it from your mailbox.
  • Keep your eye on your information (again)! Do not leave your tax returns or any of the key paperwork in the car, on the kitchen counter or on top of the desk at home.

Next week, the final part of this series, will include tips on how to tell if you’ve been a victim and what to do if you become one. See The Star from Feb. 13 for the first part of the series. If you have questions, please contact LCC Director of Information Security Paul H. Schwartz at