We always say there is no one season for tax scams; however, certain times of year bring an increase in different types of scams. And with the month of August upon us, we’ve officially entered peak Atlantic hurricane season, which lasts from early August through the end of October. You may be wondering what hurricane season has to do with being vigilant about tax scams. The answer: fake charities. Criminals and scammers love to take advantage of taxpayers who genuinely want to help victims of natural disasters, like hurricanes. In fact, the IRS recently issued a warning to taxpayers to stay alert for scams that “undoubtedly pop up when and if a hurricane occurs.” So, how does one safely donate to a charity and what are the guidelines for charitable contribution tax deductions? Axcet HR Solutions Payroll Administrator Herman McDaniel answers in this Ask the Payroll Expert Q&A.
"The IRS recently issued a warning to taxpayers to stay alert for fake charity scams that "undoubtedly pop up when and if a hurricane occurs," explains Herman McDaniel, Axcet HR Solutions payroll administrator.
Fake Charities
When news of a natural disaster breaks, it spreads quickly across the internet, local and national news, radio and print. Scammers take advantage of this and masquerade as charitable organizations collecting aid for victims from unsuspecting, well-intentioned taxpayers. Initial contact is typically made through an unsolicited phone call, social media, e-mail, or in-person. Additionally, fake charities may have websites with similar names as legitimate charities to trick people into submitting their banking information or to send funds. In addition to obtaining financial information, these criminals will try to obtain other private information from taxpayers. Fake charities operate year-round and go well beyond natural disasters. In fact, one of the largest charity scams involved four fake cancer charities run by extended members of the same family. Between 2008 and 2012, donors located across the country were conned out of $187M.
How to Safely Donate to Charitable Organizations
Fear of scammers should not stop you from donating to charitable organizations. By following a few simple guidelines, you can better protect yourself and be sure your donations actually go to a legitimate cause. If one of your goals of donating is to receive a tax deduction, be sure to review the IRS’ guidelines for charitable contributions.
As a general rule, if in doubt, assume it’s a scam.
Fake charities are one of many scams present year-round. For more information visit Tax Scams and Consumer Alerts on IRS.gov.
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