Scam artists are increasingly using technology to rip off people this tax season, IRS officials warn, and local residents have been targets.
This tax season, an e-mail scam affected Georgia residents in Augusta, Thomaston, Lithonia, Conyers and Moultrie. A bogus e-mail told recipients they would be penalized up to $10,000 for not filing their taxes by a false deadline of Jan. 31. A link in the e-mail goes to a phony Web site that appears to be the official site of the IRS and asks for personal or financial information.
“The scams have been more creative this year, and there’s been more of them. One of the things I’ve never seen before is they’re texting individuals now,” IRS spokesman Mark Green said. “The IRS does not initiate contact with taxpayers by e-mail, text or social media to request personal or financial information.”
Georgia residents in Macon and Columbus have been targeted this year by a texting scam. Con artists are also using phone scams and posing as IRS employees to “coerce people into giving out their Social Security number and financial information,” Green said.
Tax-related identity theft also has been on the rise, he said. People have been selling Social Security numbers that were stolen from restaurants, retail stores and leasing offices. Some are even selling their dependents’ Social Security numbers for $500 to $1,000 each to friends or tax preparers because they have exceeded the amount of dependents for which they can receive credit.
Some tax preparers have been inflating taxpayers’ refunds by placing dependents that don’t belong to them on their tax return. Then the preparers keep some of the money for themselves.
Kelvin Collins, the president and CEO of the Better Business Bureau of Central Georgia and the CSRA, said his office has received complaints concerning identity theft. Consumers have gone to get their taxes filed, only to find out that someone has used their identity to file taxes.
“We’re seeing an increase in that this year,” Collins said. “Many times it’s someone they don’t know that has stolen their Social Security number, filed taxes, have gotten a refund and can’t be found. It’s easy now. If you’ve got somebody’s Social Security number, you can file online, have the money deposited into an account, get the money, close the account and be gone.”
Fees charged by tax return preparers are also a problem, Green said. A number of complaints have been filed with the Better Business Bureau against the Instant Tax Service franchise on Peach Orchard Road, which is under investigation by the Governor’s Office of Consumer Protection.
The complaints generally involve people getting estimates on their taxes, then getting a call the next day saying their taxes have been filed when they weren’t aware they had given the authorization to do so, Collins said.
“Also, once the taxes are filed, they’re being charged exorbitant fees,” he said. “We’ve heard from several consumers that say they were quoted a price of $200 to $300 and when they went back to pick their taxes up, they had deducted a lot more from that. I have one consumer where they had deducted fees of $1,300.”
The Better Business Bureau is not an enforcement agency, so Collins’ office sends the complaints to the state consumer protection office, which enforces the Fair Business Practices Act of 1975. The BBB also reports the complaints to other consumers, he said.
“We have an open investigation,” Shawn Conroy, a spokesman for the consumer protection office, said of Instant Tax Service on Peach Orchard Road. “We’re in the beginning stages of our investigation, so I don’t want to characterize the complaints or the behavior until our investigation is through.”
Green said he can’t comment on the tax matters of businesses or individuals because of the IRS’ disclosure policy.
Calls to Instant Tax Service in Augusta and its corporate office have not been returned.
Appollina Bert, of Augusta, is among those who have filed complaints against Instant Tax Service. After seeing a TV ad, she and her sister visited the business Jan. 2 to apply for a loan. They were both approved for $300 and gave the business a copy of their last paycheck stubs, Bert said. If they didn’t repay the loan before 7 p.m. Jan. 16, the company would request their W-2 forms and file their taxes, charging $450, she said.
When Bert and her sister came back to repay the loan at about 5 p.m. Jan. 16, they learned Instant Tax Service had filed their federal income taxes without their knowledge, telling them they were randomly selected for an IRS test run to make sure their systems were working properly.
“I said, ‘You don’t even have my W-2s. You don’t have any of my information,’ ” Bert said.
She was also told she would have to pay a $558 processing fee, rather than $450, for having her taxes done. A worker told Bert they quoted her the wrong fee initially because of a computer glitch.
After not receiving assistance from the corporate office, Bert contacted the Better Business Bureau. She and her sister were refunded their money, but Bert still has to make corrections to her federal taxes and needs to file her state taxes and an amendment.
“There were a lot of people that contacted me and said this was not the first year that this had happened,” Bert said. She said she heard
of fees ranging from $300 to $600.
Christopher Owen, of Augusta, filed a complaint against Instant Tax Service after visiting Jan. 10, and he is still waiting on the business to repay his money.
He saw the company’s TV ad saying people could get up to a $1,000 loan. He never received the loan and was charged a $609 fee for getting his taxes done, though he was told he would be charged $250, Owen said.
When he received his refund check after a delay, the business had deducted $609. Owen was told he didn’t receive the loan because it was the first year he had used their services. His paperwork states that he received $50 within the first 10 minutes and $1,000 within 24 to 48 hours, he said.
“That’s not the case. The copy they gave me is false,” Owen said.
It’s important to find a knowledgeable, qualified tax professional, Green said. All tax professionals must have a Preparer Tax Identification Number. People should avoid anyone who asks them to sign a blank tax form, and they should use only a professional who signs their tax return, includes his or her tax ID number, and provides a copy for their records.
They should also determine whether anyone has filed complaints against the tax preparer with the Better Business Bureau, the state’s board of accountancy for CPAs or the state’s bar association for attorneys, he said.