On July 28, 2021, the IRS issued a warning to taxpayers about fake charities and scammers targeting immigrants. According to the agency, these scams often trick taxpayers into doing something illegal or that which ultimately causes them financial harm. Scammers prey on the good will of honest individuals in hopes of stealing their money. Thus, it is important to remain vigilant and knowledgeable of the various types of scams, but especially those involving fake charities and immigrant fraud.
Unfortunately, scammers take advantage of tragedies and disasters, and taxpayers should be on the lookout for scammers who establish fake organizations to take advantage of the public's generosity. Scams requesting donations for disaster relief efforts are especially common over the phone. You should always check out a charity before donating, and never feel pressured to give immediately.
Taxpayers who donate money or goods to a charity may be able to claim a deduction on their federal tax return. However, to receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, use the IRS Tax Exempt Organization Search tool. It's also important to remember that you cannot deduct gifts to individuals or to political organizations/candidates.
Follow these three steps to avoid becoming a victim of a fake charity scam:
Never let any caller pressure you to give money immediately. A legit charity will be happy to receive a donation at any time, so there is no rush to give.
Confirm that the charity is real. Ask for the charity's exact name, website, and email address so you can research the organization before deciding whether to donate. Some dishonest telemarketers use names that sound like well-known charities to confuse people, so be extra vigilant in those situations.
Make sure the charity allows for donations to be made by credit card or check. You should never work with charities that require donations be made only by giving numbers from a gift card or by wiring money. These are scams. The safest way to donate money is by credit card or check, but only after taking some time to research the charity.
For more information about fake charities see the Federal Trade Commission web site.
IRS phone impersonation scams remain common. This is where a taxpayer receives a phone call threatening jail time, deportation, or revocation of a driver's license from someone claiming to work for the IRS. These scammers often use threats and intimidation to target groups with limited English proficiency, especially new immigrants. Legitimate IRS employees will never threaten to revoke licenses or have a person deported, and the IRS generally contacts individuals by mail, hardly ever by phone.
It is important that you ignore these threats and not engage with the scammers. These are simply scare tactics used to extract money from innocent targets.
About the Author
Attorney Jordan D. Howlette is the President of MyTaxRights, LLC and the managing-member of JD Howlette Law, LLC, a civil litigation firm that represents individuals and businesses involved in tax disputes with the IRS, the United States Department of Justice (DOJ), and various state departments of revenue. A former trial attorney with the DOJ’s Tax Division, Jordan leverages his extensive background in tax litigation to educate others about their federal tax rights and responsibilities. Each tax season, Jordan also volunteers as a tax coach with the Center for the Advancement of Tax Equity, where he teaches others how to self-prepare and file their taxes through the non-profit's free tax clinics.