taxes

Beware these 'dirty dozen' tax scams that can cost you big and even land you in jail

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Fake charities
Fake charities | Tim Robberts/Getty Images

Fake charities

The tax code offers benefits for philanthropic taxpayers. It does not, however, reward those who set up improper nonprofit groups or illegally donate to them.

The IRS warns generous folks to check out charities before donating to them. Some scammers copy legitimate organizations, bearing similar names and setting up websites that look like the real deal.

Unfortunately, when bad things happen, bad people take advantage, tax and otherwise. That's why, when there are significant natural disasters, con artists come out in droves.

They impersonate charities to get money or private information from well-intentioned taxpayers, using a variety of tactics.

Some scammers operating bogus charities may contact people by telephone or email to solicit money or financial information. They may even directly contact disaster victims and claim to be working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds. Instead, they get personal financial information that can be used to steal the victims' identities or financial resources.

To verify the organization's legitimacy, ask for the charity's employer identification number, or EIN, and check it against the IRS' Exempt organizations tool. And don't give or send cash. Use a check or credit card to document your gift for tax purposes.

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