Dirty Dozen: IRS Warns of Scammers Using Fake Charities to Exploit Taxpayers

On day five of the annual Dirty Dozen campaign, the Internal Revenue Service today urged everyone to be on alert for scammers using fake charities to dupe taxpayers, especially following major disasters.

Whether an earthquake or wildfires, good-natured taxpayers rally to help victims after an emergency or disaster by donating money. Unfortunately, scammers often try to prey on well-intentioned donors by posing as fake charities, hoping to steal money, but also personal and financial data that can be used in tax-related identity theft.

“Following disasters, there are heart-wrenching situations where people want to help,” said IRS Commissioner Danny Werfel. “But scammers move quickly and use these events to try taking advantage of the public’s generosity, stealing not just money, but personal information that can lead to identity theft. Scams requesting donations are especially common over the phone, as well as by email and texts. Taxpayers should never feel pressured to give immediately, and they should look to recognized, established charities to help victims.”

As a member of the Security Summit, the IRS, with state tax agencies and the nation’s tax industry, have taken numerous steps over the last eight years to warn people to watch out for common scams and schemes each tax season that can contribute to identity theft. Along with the Security Summit initiative, the Dirty Dozen aims to protect taxpayers, businesses and the tax system from identity thieves and various hoaxes designed to steal money and information.

The Dirty Dozen is an annual IRS list of 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal data and more. Some items on the list are new, and some make a return visit. While the list is not a legal document or a formal listing of agency enforcement priorities, it is intended to alert taxpayers, businesses and tax preparers about scams at large.

Fake charities: Real scams

Bogus charities are a perennial problem that gets bigger whenever a crisis or natural disaster strikes. Scammers set up these fake organizations to take advantage of the public's generosity. They seek money and personal information, which can be used to further exploit victims through identity theft.

Taxpayers who give money or goods to a charity might be able to claim a deduction on their federal tax return if they itemize deductions, but charitable donations only count if they go to a qualified tax-exempt organization recognized by the IRS.

Fake charity promoters may use emails to solicit donations or alter or “spoof” their caller ID to make it look like a real charity is calling on the phone. They often target seniors and groups with limited English proficiency.

Here are some tips to protect against fake charity scams:

Help stop fraud and scams

As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.

To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail:

Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road
Laguna Niguel, California 92677-3405
Fax: 877-477-9135

Alternatively, taxpayers and tax practitioners may send the information to the IRS Whistleblower Office for possible monetary reward. For more information, see Abusive Tax Schemes and Abusive Tax Return Preparers.