Seattle — With tax season on the horizon, there’s been a noticeable uptick in scams targeting individuals who may be behind on their taxes. The Better Business Bureau (BBB) notes that these fraudsters are leveraging the urgency of the season to pressure people into costly decisions.
According to Cameron Nakashima from the BBB, reports of fraud related to tax companies have surged, with victims being rushed to make payments to avoid severe consequences.
“We’ve heard from individuals who have lost not just their money—hundreds or even thousands of dollars—but also their personal information due to a rise in impersonation fraud,” Nakashima shared.
How the scam operates
The BBB explains that scammers usually reach out to victims, insisting they owe taxes and urging immediate action to prevent legal repercussions.
To seem credible, these fraudsters often adopt the names of genuine tax firms, like American Tax Consultants or US Tax Relief.
“There are many examples where scammers use real company names to target unsuspecting individuals, especially during tax season,” Nakashima noted.
The consequences of these scams are broad. Over the past year, thousands across the nation have reported tax-related fraud, with scammers aiming to con nearly $6 million, per the BBB.
In Washington state specifically, the BBB has received 88 reports of tax fraud during this timeframe, with total losses surpassing $130,000. In fact, 18 of those incidents were reported just in January.
One local woman recounted losing $4,000 to a firm called “Federal Tax Group.” She said they promised to reduce or eliminate her tax liability and even provided reasons for IRS actions against her. However, after she made the payment, the company stopped communicating and failed to offer help, according to the BBB.
Ways taxpayers can protect themselves
First off, the IRS will always begin communication through official letters sent by mail.
Even if a collection agency is involved, taxpayers won’t receive a call demanding payment without first getting written notice.
Additionally, legitimate tax authorities won’t request immediate payments via gift cards, wire transfers, or digital payment apps.
Consumers should also take a moment to research any business before taking action. The BBB suggests visiting BBB.org for company evaluations, checking contact details closely, and, if uncertain, verifying claims directly with the IRS.
Lastly, the organization encourages taxpayers to collaborate with BBB-accredited tax professionals for reliable guidance in navigating tax issues safely.
