Veterans and tax scams: Preparing for tax season

Even when it isn't tax season, it is not only important to remain vigilant when it comes to your information, but also remember that fraud and identity theft are year-round. Bad actors never stop trying to access personal information or to cash in on tax benefits. Now more than ever, it is important to understand how to identify tax scams, how to protect yourself, get help and report it when you find it.

What to look for

Scams and fraud come in a variety of forms, particularly when it comes to taxes. Here are some examples:

• Bad advice on social media, misleading people into claiming tax credits they don't qualify for.
• People targeting seniors by pretending to be government officials.
• Scams targeting car dealers and sellers.

Common indicators of a scam may include:

• A big payday-if it sounds too good to be true, it probably is.
• Threats or urgent requests to pay right now or else, or to pay in a specific way.
• Misspellings and grammatical errors.
• Links, attachments or odd URLs; all trusted IRS links go to irs.gov.

Find more details on tax scams and consumer alerts that the IRS is tracking.

How to protect yourself

It is important to stay vigilant while preparing for tax season. You may receive scam calls, false links and communications seeking to steal your personal information. Review the following information to understand the best ways to protect yourself from scammers:

• Make sure it's the IRS reaching out. See tips on how to know if it's really the IRS contacting you, or give the IRS a call.
• An Identity Protection (IP) PIN can help reduce the risk of tax-related fraud.The IRS encourages the military and Veteran communities to learn more about this identity protectionprogram.
• Remember these best practices to maintain healthy cyber habits:
  • Utilize strong passwords for all devices.
  • Change passwords frequently.
  • Set security software to update automatically.
  • Turn on device encryption in your security settings.
  • Use multi-factor authentication whenever possible.

Remember your Veteran benefits

Veterans have a number of tax-related benefits that may cause them to be targets for scams. Understanding these benefits can help Veterans differentiate between legitimate communication from the IRS and potential scams.

• VA benefits are tax free.Before filing a tax return, review the VA benefits tax exemptions. Compensation, Veteran Readiness & Employment and Education payments are tax-free and should not be included as income on a federal tax return.
• There is no federal income tax on VA insurance proceeds. However, you may want to check with a financial advisor regarding state taxes. Additionally, there may be estate tax implications.
• Veterans with a service-connected disability rating may benefit from local property tax exemptions. Veterans should inquire with their local property tax assessor to further research.

For more tax-related tips and best practices for Veterans and their loved ones, visit the VA website to better understand your benefits.

How to report

For Veterans and their families wanting to seek support in any scenario where a tax fraud or scam may be present, there are several ways to find reporting channels, including:

• Reporting general scams and fraud by visiting the VSAFE website.
• Calling the cross-federal VSAFE call line at 833-38V-SAFE (8-7233).
• Reporting a tax scam or fraud to the IRS by visiting the IRS reporting webpage.

Additional resources:

For additional information on tax scams, visit IRS.gov/help/tax-scams.

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