Americans are opening up their hearts — and their wallets — to victims of Hurricanes Harvey and Irma. But not every “good cause” is legit. For that reason, the IRS has issued a stern warning for taxpayers to be on the alert for “fake” charities and other scams (IR-2017-137, 8/31/17).
While there has been an enormous wave of support across the country for hurricane victims, the IRS is cautioning taxpayers to watch out for criminals who look to take advantage of this generosity by impersonating charities. The con artists usually attempt to pry away money or private information. A fraudulent scheme may involve contact by telephone, social media, e-mail or in-person solicitations.
Notably, criminals often send emails steering recipients to bogus websites that appear to be affiliated with legitimate charitable causes. These sites frequently mimic the sites of, or use names similar to, actual charities like the Red Cross, and look to be authentic. They claim to be affiliated with those charities to convince well-meaning people to send money or provide personal financial information. They then steal their identities or financial resources — or both.
To combat potential problems, the IRS provides tools that can be used to quickly and easily check the status of charitable organizations. Have your clients visit its website at irs.gov.
Finally, the IRS has advised taxpayers who intend to make disaster-related charitable donations to follow these tips for avoiding scams:
- Be sure to donate to recognized charities.
- Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. The IRS website at irs.gov has a search feature, Exempt Organizations Select Check, where you can find qualified charities. Donations to these charities are tax-deductible, subject to the usual rules and limits.
- Don’t give out personal financial information — such as your Social Security number or credit card and bank account numbers and passwords — to anyone soliciting a contribution. Crooks may use this information to steal your identity.
- Never give or send cash. For security and tax record purposes, contribute by check or credit card or some other way that provides documentation of the donation.
- Consult IRS Publication 526, Charitable Contributions. This free booklet describes the tax rules that apply to making legitimate tax-deductible donations. Among other things, it also provides complete details on what records to keep.
Taxpayers suspecting fraud by email should visit irs.gov and search for the keywords “Report Phishing.” More information about tax scams and schemes may be found on the website by using the keywords “scams and schemes.”
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It’s best to err on the side of caution. If you’re unsure if an organization is legitimate or not, opt to contribute instead to the Red Cross or other charity you know to be real.
Don’t open up a can of worms by relying on an unknown entity.
About Ken Berry
Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a wide variety of newsletters, magazines, and other periodicals.