February 15, 2017

Brighton Securities offers income tax preparation services which have been growing steadily over the past few years. We have even expanded our office space to develop the addition of a dedicated tax services wing to accommodate our clients, CPA, and tax preparation professionals!

 Naturally, many of our private wealth clients use our tax preparation services for the convenience as part of our comprehensive wealth management planning, the excellent service, and competitive cost. Due to our expertise, there have been several instances where we have helped clients save on their taxes and have even been able to find additional savings from the previous year’s return that were overlooked by an outside preparer.  However, over past few tax seasons, we have started to notice some troubling trends when it comes to filing.

Unfortunately, financial scams and identity theft are not only with credit cards and bank accounts, but they have expanded into taxes. Inevitably there are an unlucky few who are plagued with identity theft at tax time in a variety of ways. It is very important to be aware of phishing schemes and other potential ways that these criminals can get your personal information.

This article outlines “five hot scams” to be aware of during tax season:

  1. The IRS DOES NOT CALL ANYONE- If you get a call from the IRS or a “tech support” team desk never give out your personal information such as any passwords, dates of birth, address, etc. Every year a client will tell me they got a call from the IRS and I tell them- the IRS does not make phone calls. If this happens to you: hang up the phone. The article above states that Turbo Tax has warned customers to be aware of fake emails with attractive statements like: claiming “extra refund”.
  2. Do NOT email your W-2- the IRS commissioner called the latest trend, of people getting emails asking for W-2 forms, one of the most dangerous scams they’ve seen in a long time. The article sites that scammers will send emails to office managers or business executives stating "Kindly send me the individual 2016 W-2 (PDF) and earnings summary of all W-2 of our company staff for a quick review." These emails should never be opened or responded to.
  3. Tax Professionals targeted too- emails being disguised as “referrals” or “additional questions” should never be opened unless you know the sender. These emails can contain faulty links which, if clicked on, capture login credentials as passwords. Our firm protects against this by calling our clients directly and utilizing only known email addresses for communications. We also have a full time IT staff for technical systems protection.
  4. The scammer files before you-fraudulent returns can be filed with your social security number and your ID information early in the season to try and beat you to the punch. When you go to file the real return it will be rejected. The IRS has been very good with flagging these returns as they tend to look very different, with generous tax credits, to try and gain the system. However, there are still many that fall through the cracks. If this happens to you, go to your local IRS office and work with a case manager to fill out the appropriate paperwork so the fraudulent return is identified and yours is filed correctly. You never know when someone may steal your identity and file a fraudulent return so it is important to get your taxes in as early as possible and pay close attention when processed. Your CPA should be able to confirm your successful filing or identify if there is a rejection and why.
  5. Phony refunds-there are tax preparers out there who are looking to scam their clients. Be wary of tax preparers who charge a fee based on your refund or boast bigger refunds than others. The IRS has a directory of preparers with credentials that you should check before hiring them.

This tax season, and every tax season, you should be aware of what could happen. Sometimes there isn’t a clear or easy way to protect against fraud. Other times it can be very avoidable.

Finally, sometimes clients will ask me “why would I pay someone to prepare my taxes when I can do it myself”? A perfectly reasonable question, I tell them for some people it’s a necessity because they can’t do it themselves. For you, it’s a luxury that saves you a weekend worth of time with peace of mind it’s taken care of. This will enable you go to do the other things on your list or spend more time with your family. We all lead busy lives and time is one of our most valuable assets-use it wisely.

(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author’s opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).