If you see someone carrying a lot of groceries you hold the door open for them. If you see a child crying you want to help them. It’s just in your nature to help those who truly need it but, as with most things, there will always be those seeking to take advantage of good natured people like yourself.
The IRS wants taxpayers to be wary of fake charity scams popping up in response to natural disasters and tragic crises in the world. Scammers like to take advantage of these situations to make a quick buck at the expense of the donator and those the donations could be going towards. IRS Commissioner Danny Werfel sums it up perfectly in his quote, “Knowing we’re trying to aid those who are suffering, criminals crawl out of the woodwork to prey on those most vulnerable – people who simply want to help. Especially during these challenging times, don’t feel pressured to immediately give to a charity you’ve never heard of. Check out the charity first and confirm it is authentic.”
As a tax professional you want to protect your clients from being taken advantage of by scammers and cyber criminals. Luckily the IRS has created a tool to help tax pros and their clients better identify real vs fake charities. The Tax-Exempt Organization Search tool was created by the IRS to allow donors to; verify the authenticity of a charity before they donate, check a charity’s ability to receive tax-deductible donations, and find information about an organization’s tax-exemption status.
Scammers using fake charities are after your money and personal information to be used in identity theft crimes. These scammers can be clever too, using fake emails, websites, or social media accounts to make their scams look like legitimate organizations. Oftentimes they will target vulnerable populations such as senior citizens and those with limited english-speaking abilities.
Spotting these fake charities is possible with a couple of simple tips.
Verify: While the charity may sound legitimate, be sure to double check. Ask for as much information as possible such as the exact name of the organization and for associated websites and social media accounts. Remember to use the Tax-Exempt Organization Search (TEOS) to verify the charity’s legitimacy.
Take Your Time: Often, scammers will want money on the spot while legitimate charities are content with letting you take time to decide and donating at a later point. If whoever has reached out to you in pressuring you to donate there is a good chance it’s a scam. The same goes with your personal information. Protect your personal data at all costs and only share it with trusted sources. No matter who they may claim to be.
Be Wary: If a charity is asking you to donate in an odd way then there is a good chance it is fake. The safest way to donate is via credit card or check, if the charity is asking for donations via gift card codes or bank transfers then it’s safe to assume they aren’t a legitimate charity.
Feel free to share or republish this article with your clients in order to keep them informed about the dangers of fake charities that are after their money. Taxpayers who donate to legitimate charities are able to claim a deduction (see Publication 526) if they itemized their deductions.
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