April 3, 2017
Authored by: Tiffany McKenzie
Written by Emily Manns and originally posted on BryanCaveCharityLaw.com
Every year, the IRS issues its “Dirty Dozen” Tax Scams list, a compilation of tactics and devices used by scam artists against taxpayers. While the threat exists year-round, the IRS promulgates the list ahead of filing season. As susceptible taxpayers prepare their returns, they face a higher risk of being targeted.
Included in the 2017 “Dirty Dozen” list are fake charities; however, this is hardly a new occurrence. Fraudulent charities and organizations have a long-standing history of soliciting donations from unsuspecting individuals. In its 2017 report, the IRS notes three steps taxpayers should take in making charitable contributions.
One: Keep your information private. Individuals are advised against sharing their personal information, such as a Social Security Number or passwords, as this is commonly used in identity theft. The IRS reminds individuals that a legitimate charity will never ask for such information in soliciting or receiving donations.
Two: Avoid cash. When making a donation, individuals should use check or credit card. In the case of the latter, credit card information should only be used over a secure network.
Three: Do your homework. As a matter of good practice, the IRS recommends using the Exempt Organization Select Check Tool to ensure that your donation is directed to a legitimate organization. The Tool allows donees to view an organization’s federal tax filings, and other information, such as whether exempt status has been revoked or suspended. The Tool is available here.
The Dirty Dozen also advises donors to be wary of fraudsters in the wake of natural disasters. During such times, fake charities may solicit donations under the guise of disaster-relief funds. The IRS encourages donors to make contributions to officially recognized organizations, such as the Red Cross or UNICEF. The Exempt Organizations Select Check Tool is another way to verify a relief or human-rights organization as legitimate.
Find the IRS complete list of Dirty Dozen scams for 2017 here.