Charity fraud: be on your guard, scammers may use phony charities to trick you.
The Internal Revenue Service (IRS) would like you to be on alert for scammers who use fake charities to commit fraud, especially during the holiday season.
Scammers operate year-round but they are more active during the holiday season and other timely events to try to reach out to you and lure you into a donation. Here are some of the things that you should do for your own safety:
• Ensure that your money goes only to legitimate charities.
• Protect your personal and financial data that can be used in tax-related identity theft.
HOW DO FAKE CHARITIES SCAMMERS OPERATE
Scammers typically act in the following ways:
- They set up fake charities.
- They request donations for disaster relief effort by phone.
- They use emails, text messages, websites and social media messages that mimic a legitimate charity to trick you into giving money or personal information.
- They can use your personal information to try to file fake tax returns and obtain refunds.
HOW YOU CAN AVOID FAKE CHARITIES SCAMS?
- Don’t give in to pressure. Scammers may use the technique of urgent need to pressure you into making an immediate payment. Legitimate charities are happy to get a donation at any time, there’s no rush.
- Take time to do your own research. Scammers may alter or “spoof” their caller ID to make it look like a real charity.
- Be wary about how a donation is requested. You shouldn’t work with charities that ask for donations by giving numbers from a gift card or by money transfer. That’s a scam. Instead, research the charity, ask to pay by credit card or by check.
- Don’t give more than needed. You should first ensure that the charity is legitimate. Then, you should give limited financial and personal information. Scammers are seeking money, but personal information can be just as valuable.
Example: never give out your social security number, credit card number or PIN number. You should treat personal information like cash and not hand it out to just anyone.
TAX WRITE-OFF
You may be able to claim a deduction on your federal tax return if you give money or goods to a charity. You claim the deduction by reducing the amount of your taxable income. You must also meet the following requirements:
- Your donation must be to an IRS approved charitable organization.
- You must itemize deduct your expenses and don’t take the standard deduction.
The Security Summit partnership between the IRS, state tax administrators and the tax software and tax professional community have been working together since 2015 to improve defenses and protect people from tax-related identity theft. As part of that effort, the Summit partners worked on the following issues:
• To raise taxpayer and tax professional awareness about security issues; and
• To help protect the nation’s tax system from refund-related fraud.