Each year, the IRS releases its list of “dirty dozenâ€ tax scams to watch out for. Among the twelve are charitable donation scams. Fraudsters will pretend to be a legitimate charity and then proceed to rob you blind.
This type of tax scam has become increasingly popular after significant natural disasters like Hurricanes Katrina and Sandy. Right after a big disaster, you can bet scammers will be on the move and ready to take advantage of you.
Generally, they impersonate charities to obtain money and your personal information.
Some tactics often used by scammers:
- Operating a fake charity. They might contact you via phone or email to get your money or financial information. Worse yet, they might contact disaster victims directly and claim to be working for or on behalf of the IRS to help them file casualty loss claims and get tax refunds.
- Setting up fake websites. Fraudsters will stop at nothing to steal financial information or Social Security numbers. They will sometimes establish fake websites and ask for money to “helpâ€ disaster victims.
The IRS gives these tips for avoiding scam artists:
- Donate to recognized charities.
- Use caution when you come across charities with names that are similar to familiar or nationally known organizations. Some fraudulent charities use names or websites that are confusingly similar to legitimate organizations.
- Don’t give out personal financial information, such as Social Security numbers or credit card and bank account numbers and passwords, to anyone who solicits a contribution from you.
- Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.
The IRS advises you to call theirÂ disaster assistance hotline (866-562-5227) if you are a disaster victim withÂ questions about tax relief or disaster-related tax issues.