Karl Racine

D.C. Attorney General Karl A. Racine cautioned residents to be vigilant against fraudulent schemes. (Courtesy Photo)

The Internal Revenue Service has increased its efforts to ward off scam artists who prey upon the unsuspecting. Calling the scams “a major threat to taxpayers,” D.C. Attorney General Karl A. Racine cautioned residents to be vigilant against fraudulent schemes that are common during tax season.

“At the Office of the Attorney General, we work hard every day to protect consumers from those who want to defraud District residents of their hard-earned dollars,” Racine said in a statement. “Some con-artists use tax-filing season, when millions of Americans are sharing important financial information via the mail and online, to take advantage of consumers. That’s why we have identified below some of the most common fraud schemes that crop up during tax season.”

Racine posted tips on six scams that had the potential to hit District residents and devastate their finances on the dc.gov website. The tips include:

Phone Fraud: Taxpayers may receive telephone calls – which can often be aggressive in tone and contain threats – from criminals posing as Internal Revenue Service (IRS) agents. The calls often threaten prosecution if the taxpayer does not immediately pay a fine, which can total thousands of dollars. These callers also threaten arrest, deportation, the revocation of licenses, and other negative consequences as a result of purported tax debts. In most cases, if a taxpayer owes back taxes, the IRS does not first contact the taxpayer by phone; rather the IRS will usually first contact those who owe taxes via mail. The IRS also does not demand immediate payment, cash payments, or ask for credit-card or debit-card numbers over the phone.

Phishing: Phishing is the practice of disguising fake emails or setting up fake websites as legitimate ones in an effort to steal personal information. The IRS generally does not first make contact with taxpayers through emails, text messages, or social-media outlets. Consumers should not click on any links in electronic messages claiming to be from the IRS if the message arrived without warning.

Identity Theft: Taxpayers should always be vigilant about identity theft, but particularly during tax season. Criminals sometimes file fraudulent returns using someone else’s Social Security number in order to claim their refunds. In the most recent three fiscal years, IRS investigators helped convict approximately 2,000 identity thieves.

Return Preparer Fraud: While the vast majority of tax professionals provide honest tax-preparation services, some dishonest preparers set up shop during tax-filing season to perpetrate refund fraud – including identity theft and other schemes that defraud taxpayers. Return preparers are a vital part of the U.S. tax system. Legitimate preparers of federal returns should have an IRS Preparer Tax Identification Number (PTIN). Anyone with a valid 2016 PTIN is authorized to prepare federal tax returns.

Inflated Refund Claims: Taxpayers should be wary of any tax preparer who promises outlandishly large refunds. Taxpayers should also avoid any preparer who asks them to sign a blank return, promises a large refund before examining their tax records, or who charges fees based on a percentage of the refund. These kinds of fraudsters often attract victims using flyers, advertisements, phony storefronts, and word-of-mouth via community and religious groups.

Fake Charities: Taxpayers should always be vigilant to avoid organizations masquerading as legitimate charities to attract donations from unsuspecting contributors, but particularly during tax season. If you believe you have been the victim of an IRS or Charity Scam, please call the Attorney General’s Office of Consumer Protection at (202) 442-9828.

Racine said he urges anyone who believes they have been the victim of such schemes, to contact the Consumer Protection Hotline at 202-442-9828 or send an e-mail to consumer.protection@dc.gov.