The dreaded tax season is now upon us and many of us are scrambling to get together our paperwork and scratching our heads on how to optimize our returns. This is why it is also an ample opportunity for con artists and scammers to take advantage of your stress and confusion. Here are 4 key ways to avoid TAX scams this spring.
- Identity Fraud
Identity fraud is North America is increasing steadily every year and because of its sneaky nature, can financially ruin individuals and take years to prove that it had actually happened to you. Your tax forms contain most of your vital information – including SIN, income, birthplace and date, etc. – so they are the perfect resource for con artists to obtain, use and abuse. Make sure that if your documents are on the computer or online, they are always password protected. In printed form, always make sure they are stored in a secure location, preferably in a lock box.
- Email Scams
The Canadian Revenue Agency (CRA) will NEVER contact you by email. Delete these messages immediately – they are a SCAM. If in doubt, call 1-800-959-8281 – this is the CRA’s help line. Do not use any of the contact information listed in the alleged email.
- No Freebies
Offering “free money” is a very common scam that many people fall for. Don’t be disillusioned by advertisements or people selling temporary and quick financial relief. They are always scams. The CRA does not give out free money.
- Always check your Accountant’s references
Taxes can get complicated very quickly and many people will hire on an accountant or preparer to help them through the process. While many of these people will be helpful and trust worthy, as with any profession, there are always a handful of bad apples who are fraudulent. Putting your trust into a dishonest preparer can leave you legal problems with the CRA. A common scam is for them to illegally inflate your tax return, taking a large cut but leaving you with the responsibility and blame once the CRA discovers this. Your preparer/accountant should always sign the return and include their ID number. Ask for references and when in doubt get a second opinion.
Whether you have to pay out or are getting a refund this year, remember how important it is to protect yourself and your information this TAX season.
Here are some additional resources that offer a more detailed description of current scams and how to protect yourself against them - CLICK HERE