The IRS is warning about possible fake charity scams that are emerging due to Hurricane Harvey. Taxpayers who want to help should seek out recognized charitable groups to make donations.
“While there has been an enormous wave of support across the country for the victims of Hurricane Harvey, people should be aware of criminals who look to take advantage of this generosity by impersonating charities to get money or private information from well-meaning taxpayers,” the IRS stated. Such fraudulent schemes may involve in-person solicitations or contact by telephone, social media and e-mail.
Criminals often send “phishing” e-mail messages that steer recipients to bogus websites that appear to be affiliated with legitimate charitable causes. These sites frequently try to imitate the websites of — or use names similar to — genuine charities. They sometimes claim to be affiliated with legitimate charities in order to persuade people to send money or provide personal financial information that can be used to steal identities or financial resources.
Follow these Four Tips
People wishing to make disaster-related charitable donations while helping to avoid scam artists should follow these tips:
1. Donate to recognized charities. But be wary of charities attempting to contact you with familiar names. Some phony charities use names or websites that sound or look like those of respected, legitimate, nationally known organizations. The IRS website has a search feature, Exempt Organizations Select Check. With it, people can find qualified charities and donations to these charities may be tax-deductible (depending on your tax filing status and other factors).
2. Don’t give out personal financial information — such as Social Security numbers or credit card and bank account numbers and passwords — to anyone who solicits a contribution. Scam artists may use this information to steal your identity and money.
3. Never give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the donation.
4. Report suspected fraud. Taxpayers suspecting tax or charity-related fraud should visit IRS.gov and perform a search using the keywords “Report Phishing.”
Want More Information?
Additional information about donations can be found in IRS Publication 526, Charitable Contributions, available on IRS.gov. This free booklet describes the tax rules that apply to making legitimate tax-deductible donations. It also provides complete details on what records to keep.
If you want more information about tax scams and scheme, it can be found at IRS.gov using the keywords “scams and schemes.” Details on available relief can be found on the disaster relief page.
And you can always contact us with questions about the tax implications of charitable contributions.
Eric Cohen, CPA is the President and Founder of E. Cohen and Company CPAs, a full-service CPA firm serving nonprofit organizations, government contractors, professional service companies and other industries with audit, tax and business advisory services for over 26 years. The firm was commended as a SmartCPA Reader’s Choice by SmartCEO magazine and a “Best Accounting Firm to Work For” by AccountingToday magazine. For more information, visit www.ecohencpas.com or call 301-917-6200.