Tax Scams and How to Avoid Them

Monday, January 22 at 02:00 PM
Category: Personal Finance

Arvest Bank recognizes the ongoing threat of criminals trying to steal your funds or obtain your personal information or account information. As tax season approaches, these threats take on other forms. In recent years, thousands of people have lost millions of dollars and their personal information to tax scams and fake IRS communication. Scammers use the regular mail, telephone, fax or email to set up their victims. This article looks at the different scams affecting individual and businesses and what to do if you if you spot a tax scam. 

REMEMBER: The IRS does not initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. In addition, IRS does not threaten taxpayers with lawsuits, imprisonment, or other enforcement action. Recognizing these telltale signs of a phishing or tax scam could save you from becoming a victim. See also: How to know it’s really the IRS calling or knocking on your door

Scams Targeting Taxpayers

IRS-Impersonation Telephone Scams

An aggressive and sophisticated phone scam targeting taxpayers has been making the rounds throughout the country. Callers claim to be employees of the IRS, using fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling. 

Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. Victims may be threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Or, victims may be told they have a refund due to try to trick them into sharing private information. If the phone is not answered, the scammers often leave an “urgent” callback request. Please See: Consumer Alert: Scammers Change Tactics, Once Again

Some con artists have used video relay services (VRS) to try to scam deaf and hard of hearing individuals. Taxpayers are urged not trust calls just because they are made through VRS, as interpreters do not screen calls for validity. For more details see the IRS YouTube video: Tax Scams via Video Relay Service

Con artists often approach victims with Limited English Proficiency in their native language, threaten them with deportation, police arrest and license revocation, among other things. IRS urges all taxpayers caution before paying unexpected tax bills. Please see: IRS Alerts Taxpayers with Limited English Proficiency of Ongoing Phone Scams.  Note that the IRS will never:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Ask for credit or debit card numbers over the phone.

Surge in Email, Phishing and Malware Schemes

When identity theft takes place over the web (email), it is called phishing

The IRS has issued several alerts about the fraudulent use of the IRS name or logo by scammers trying to gain access to consumers’ financial information to steal their identity and assets. 

Scam emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. These phishing schemes may seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information.

Be alert to bogus emails that appear to come from your tax professional, requesting information for an IRS form. IRS does not require Life Insurance and Annuity updates from taxpayers or a tax professional. Beware of this new scam.

Variations of these scams can be seen via text messages. The IRS is aware of email phishing scams that include links to bogus web sites intended to mirror the official IRS web site. These emails contain the direction “you are to update your IRS e-file immediately.” The emails mention USA.gov and IRSgov (without a dot between "IRS" and "gov"), though not IRS.gov (with a dot). These emails are not from the IRS.

The sites may ask for information used to file false tax returns or they may carry malware, which can infect computers and allow criminals to access your files or track your keystrokes to gain information.  Additionally, please be aware that Arvest Bank does not make use of "pop-up" web browser windows on our websites for surveys, free credit reports or promotional offers. If a pop-up window appears when visiting our web site, such as when using Arvest Online Banking, it may be caused by unauthorized "adware" or "spyware" software installed on your computer which monitors your web browsing activity.

Soliciting Form W-2 information from payroll and human resources professionals.

The IRS has established a process that will allow businesses and payroll service providers to quickly report any data losses related to the W-2 scam currently making the rounds. See details at Form W2/SSN Data Theft: Information for Businesses and Payroll Service Providers. If notified in time, the IRS can take steps to prevent employees from being victimized by identity thieves filing fraudulent returns in their names. There also is information about how to report receiving the scam email.

How to Report Tax-Related Schemes, Scams, Identity Theft and Fraud

To report tax-related illegal activities, refer to this chart explaining the types of activity and the appropriate forms or other methods to use. You should also report instances of IRS-related phishing attempts and fraud to the Treasury Inspector General for Tax Administration at 800-366-4484.

How to Report Fraud Related to Your Arvest Accounts

  • To report Identity Theft, financial fraud or an unauthorized transaction in your account, please contact Customer Service immediately at (866) 952-9523.
  • To report a lost or stolen credit, debit or ATM card, please contact Customer Service immediately at (866) 952-9523 or by using our Contact Us page.
  • To report a suspicious email, phone call or text message, please forward the suspicious email to, or send a message to: reportfraud@arvest.com.
Tags: Tax
 

Smart Things to Do with Your Tax Return

Monday, February 20 at 10:15 AM
Category: Personal Finance

What's not to love about receiving money? It's why millions and millions of people play the lottery each year. And while most won't be lucky enough to win the jackpot, they may very well receive money in a far more common way — getting a tax refund.

For some Americans, tax time is a time of excitement as they wait for a check in the mail or an electronic bank account deposit from Uncle Sam due to overpayment of taxes. Because this money is often considered extra money, many people will use the funds to splurge — maybe take a vacation or install a big screen TV. But while those may be considered fun purchases, the excitement of having them often wears off pretty quickly.
 
If, however, you use your refund wisely, you can take advantage of long-lasting benefits. Here are some great suggestions for putting your tax refund to work all year long:
  • Build an emergency fund. Many people live paycheck to paycheck. That makes managing unexpected expenses, such as car or home repairs difficult to manage. One way to protect yourself from unexpected expenses or losses in income is to have an emergency fund in a liquid savings account.
  • Reduce debt. Do you have higher-interest credit card, auto loan or other debt? Consider using your tax return to pay down your debt. It's always wise to pay off the highest-interest debt first.
  • Make home improvements. Does your home need new windows or a new roof? Consider using your tax return money to finance these important home improvements which can add value to your home.
  • Make an energy-efficient purchase. Use your refund to purchase energy-efficient appliances, such as a dishwasher, dryer or refrigerator, which can save you money all year long.
  • Start a college savings plan. If you have children, consider using the funds to open an Education IRA or 529 college savings plan. Once you open the plan, arrange to invest in the fund on an ongoing a basis. Even a small amount of money each month will add up over time.
  • Save for retirement. If you don't have a retirement plan through your employer, consider opening an Individual Retirement Account (IRA) with your refund check. Be sure to check with your tax advisor first.
  • Pre-pay your mortgage. If you want to reduce the term of your loan and the amount of interest you will pay over the life of the loan, consider putting the funds from your tax return down on the principal of your mortgage.
The decision on how to best use your tax return depends on your unique financial situation. However, if you choose any of the options above, you're sure to win.

Tags: Financial Education, Tax
 

Beware of Tax Scams

Friday, January 13 at 09:00 AM
Category: Personal Finance
If it sounds too good to be true, it probably is! In recent years, thousands of people have lost millions of dollars and their personal information to tax scams and fake IRS communication. Here’s a look at some of these tax scams and what to do if you spot them.
 
Remember: The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. In addition, the IRS does not threaten taxpayers with lawsuits, imprisonment or other enforcement action by email, text messages or social media channels. Being able to recognize these tell-tale signs of a phishing or tax scam could save you from becoming a victim.

IRS-Impersonation Telephone Scams
An aggressive and sophisticated phone scam targeting taxpayers has been making the rounds throughout the country. Callers claim to be employees of the IRS but are not. These con artists can sound convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling. 
 
Victims are told they owe money to the IRS, and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are threatened with arrest, deportation, or suspension of a business or driver’s license. Or, victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn't answered, the scammers often leave an “urgent” callback request.
 
Note the IRS will never:
  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Ask for credit or debit card numbers over the phone.
Surge in Email, Phishing and Malware Schemes
The IRS saw an approximate 400 percent surge in phishing and malware incidents in the 2016 tax season. Scam emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. Emails can seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information. Variations of these scams can be seen via text messages.

When people click on these email links, they are taken to sites designed to imitate an official-looking website, such as IRS.gov*. The sites ask for Social Security numbers and other personal information, which the scammers could use to help file false tax returns. The sites also may carry malware, which can infect people's computers and allow criminals to access your files or track your keystrokes to gain information from your personal computer.
 
Email Phishing Scam: "Update your IRS e-file"
The IRS is aware of email phishing scams that appear to be from the IRS and include a link to a bogus website intended to mirror the official IRS website. These emails contain the direction “you are to update your IRS e-file immediately.” The emails mention USA.gov and IRSgov (without a dot between "IRS" and "gov"), though notably, not IRS.gov* (with a dot). Don’t get scammed. These emails are not from the IRS.

What do you do if you get these messages?
  • Do not respond to the email or click on the links.
  • Instead, forward the scam emails to the IRS at phishing@irs.gov.
For more information, visit the IRS's Report Phishing* web page.
 
Tax Refund Scam Artists Posing as Taxpayer Advocacy Panel
According to the Taxpayer Advocacy Panel (TAP), taxpayers are receiving emails that appear to be from TAP about a tax refund. These emails are a phishing scam, where unsolicited emails which seem to come from legitimate organizations — but are really from scammers — try to trick unsuspecting victims into providing personal and financial information. Do not respond or click the links in them. If you receive an email that appears to be from TAP regarding your personal tax information, please forward it to phishing@irs.gov and note that it seems to be a scam email phishing for your information.

TAP is a volunteer board that advises the IRS on systemic issues affecting taxpayers. It never requests, and does not have access to, any taxpayer’s personal and financial information such as Social Security numbers, PINs or passwords and similar information for credit cards, banks or other financial institutions.

Don’t Fall Victim and Help Others Not to Fall Victim
Educate yourself on tax telephone scams and various tax email phishing scams including malware schemes to avoid falling victim to a scammer’s tactics. Learn more* about specific tax-related scams.

Check out* the various types of tax-related illegal activities and how to report these activities. You may also report instances of IRS-related phishing attempts and fraud to the Treasury Inspector General for Tax Administration at (800) 366-4484.

Information courtesy of IRS.

Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution. 

Tags: Consumer Protection, Financial Education, Fraud Alert, Tax
 

5 Ways to Make Your Tax Refund Count

Friday, April 22 at 11:15 AM
Category: Personal Finance

According to the Internal Revenue Service*, the nation’s taxpayers received an average tax refund of nearly $3,000 in 2015. This year, with more than 70 percent of taxpayers receiving a refund, the American Bankers Association* is highlighting five tips to help them make the most out of their windfall.

“Tax season is a great time for consumers to reassess how they allocate extra cash,” said Corey Carlisle, executive director of the ABA Foundation. “It’s wise to take steps toward securing your financial well-being like storing your refund for rainy days or using it to get a jumpstart on saving for retirement.”
 
To help consumers make the most out of their money, the American Bankers Association has highlighted the following tips:
  • Save for emergencies. Open or add to a high-yield savings account that serves as an “emergency fund.” Ideally, it should hold about three to six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car.   
  • Pay off debt. Pay down existing balances either by chipping away at loans with the highest interest rates or eliminating smaller debt first.
  • Save for retirement. Open or increase contributions to a tax-deferred savings plan like a 401(k) or an IRA. Where can you get one? Your bank can help set up an IRA, while a 401(k) is employer-sponsored.
  • Put it toward a down payment. The biggest challenge that most first-time home buyers face is coming up with enough money for a down payment. If you intend to buy a new home in the near future, putting your tax refund toward the down payment is a smart move.
  • Invest in your current home. Use your refund to invest in home improvements that will pay you back in the long run by increasing the value of your home. This can include small, cost-effective upgrades like energy-efficient appliances that will pay off in both the short and long term. If you have more substantial renovations in mind, your bank can help with a home equity line of credit.
Make your tax refund count so you can enjoy the long-term benefits by planning ahead how you’re going to use it. 

Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution.

Tags: Debt, Financial Education, Retirement, Tax
 

Money and Banking Tips for Tax Season

Monday, March 09 at 09:50 AM
Category: Personal Finance

Another year has flown by and April 15 will be here before you know it! How can you save money and avoid a variety of problems at tax time?

Guard against tax-related frauds. Examples include scam emails falsely claiming to come from the IRS. Many of these are intended to trick taxpayers into revealing Social Security numbers and other personal information that can be used by criminals to steal victims' identity and money, including tax refunds. Others involve phone callers saying the taxpayer owes money to the IRS that must be paid promptly by wire transfer (where a portion or all of the funds go to the crook) or by loading funds onto a prepaid debit card and then sharing the number. The scammer may try to intimidate a targeted victim who refuses to cooperate, such as by threatening arrest or suspension of a business or driver's license. Learn more from the IRS about the latest tax frauds* targeting consumers on their website.

Carefully choose how to prepare your taxes. At tax time, you gather and submit a substantial amount of sensitive information that, if misused, could cause you significant problems. If you are using a computer program to prepare your return, make sure that your computer has an up-to-date security package.

If you plan to hire a tax preparer, consider factors such as the preparer's professional background and credentials, as well as the likelihood that the preparer will be around to help you answer questions the IRS may ask months after your return has been filed. See tips from the IRS on how to choose a tax preparer*, including red flags to avoid.

After you choose a preparer, carefully review the completed tax return. Question any income and/or deductions on the return that you do not recognize. Unsupported or omitted income and deductions can be red flags for the IRS and can be signs of an unscrupulous preparer who may deliberately make fraudulent errors, such as inflated claims for deductible expense. When the IRS detects these unsupported claims, the taxpayer is responsible for paying additional taxes, interest and perhaps substantial penalties.

Be cautious with offers by tax preparers to handle your refund. These include suggestions that they can somehow get your money faster or that you should direct deposit your refund into any bank account other than your own. These services can be costly and perhaps even put you at additional risk for fraud.

Put some of your refund into savings or toward paying down debt. If you're expecting a refund, consider deciding how much of it you can save toward a goal or for a "rainy day fund" for unplanned expenses. You can direct deposit your tax refund into up to three different accounts at three different U.S. financial institutions, including savings accounts. And, you can use part of your refund to purchase a U.S. Savings Bond for yourself or for someone else. Also consider using part of your refund to pay on loans and other bills, starting with the ones that charge the highest interest rates.

If you owe money on your taxes, consider the best way to pay it. You can have your payment withdrawn electronically from your bank account on a date you specify, such as April 15, but make sure you have enough money in your account. If you don't have money to pay your tax balance, you have several choices, including an IRS monthly installment plan. Also remember that borrowing money on a credit card to pay your taxes can result in additional costs.

Plan for next year's tax return. If you're expecting to receive a significant tax refund or owe money, consider filling out a new W-4 form with your employer to adjust your "personal allowances." This adjustment may reduce or increase the taxes withheld each pay period.

And, if you owed a lot of money on last year's taxes, you may want to increase your withholding (or your estimated tax payments if you are self-employed) to reduce the risk of a penalty for underpayment of your taxes during the year.

Regardless, you may be able to reduce your taxes through contributions to tax-preferred retirement plans and higher education savings vehicles such as a 529 Plan for college savings.

Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution.
 
Tags: Financial Education, Tax

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