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Beware Sandy charity scams

By Kay Bell · Bankrate.com
Tuesday, November 13, 2012
Posted: 1 pm ET

I like to think there's a special place in hell for con artists. And I hope it's particularly hot for crooks who use disasters to take advantage of people.

Judging by what happens every time a tragedy strikes, it will be a very full section of the underworld.

The latest folks to punch their tickets to Hades are those who've fabricated charities to collect donations for Superstorm Sandy victims.

The Internal Revenue Service keeps tabs on nonprofits. Groups have to register to maintain their tax-exempt status, and donors can deduct charitable gifts only if they're made to approved organizations.

Unfortunately, says the IRS, a lot of scam artists are now using Sandy as the basis for their fake charities that they use to collect money or financial information from well-intentioned taxpayers.

These fraudulent schemes have popped up via telephone, social media and email outreach, as well as by in-person solicitations.

In addition to duping well-meaning donors, the IRS says some scam artists also have directly contacted disaster victims in the guise of working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds.

The fake IRS employees ask storm victims for personal financial information or Social Security numbers, with which they then steal the identities and/or financial resources.

I know it's tempting to take help when you're in such dire straits that follow natural disasters. And it's equally easy for those who want to help to eagerly give to groups providing recovery services.

But before lending a hand if you're a donor or taking that hand if you're a storm survivor, be sure the offer of assistance is real.

To avoid being a victim, either as a donor or a person seeking help, the IRS suggests:

  • Donate only to recognized charities.
  • Be wary of charities with names that are similar to familiar or nationally known organizations. Phony charities sometimes use names or websites that sound or look like those of respected, legitimate organizations. Check out any group before you give. You can use the special IRS online search feature, Exempt Organizations Select Check, to find legitimate, qualified charities to which donations may be tax-deductible.
  • Do not ever give out personal financial information -- such as Social Security numbers, credit card and bank account numbers, and passwords -- to anyone soliciting a contribution. If you want to give, go to the legitimate website to find ways to donate.
  • Do not give or send cash. Not only is this the easiest way for the crook to make off with your intended donation, if you plan to deduct the donation, do so by check or credit card. That way you'll have the documentation the IRS requires of charitable deductions.

If you're a storm victim who's approached by someone purporting to help with your disaster-related taxes, say no thanks. Then call the IRS toll-free disaster assistance telephone number -- (866) 562-5227 -- for answers to specific questions about tax relief or disaster-related tax issues.

And if you run across any suspected disaster-related fraud attempts, let the IRS know. Go to IRS.gov and search for the keywords "report phishing" for details.

Get the latest alerts on tax scams, as well as on tax-reform prospects, state taxes, filing deadlines, IRS announcements and tax-saving tips by subscribing to Bankrate's free Weekly Tax Tip newsletter.

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1 Comment
Stephen Dent
November 15, 2012 at 10:00 am

I know I have had three people that gave to some. save the animals. Be safe and check out the company before you give.