IRS Warns of Charity Scams after Disasters

Cheating donors and victims of natural disasters sound awful, but there are unscrupulous individuals and groups that do exactly that. The IRS has issued a warning to taxpayers to stay alert of bogus charity scams. Most bogus charities become active or mushroom after a major natural disaster such as the recent typhoon in the Philippines. 

As scammers expect many people to want to contribute to the relief of those affected, they use false trusts and organizations to get cash and/or merchandise. Many gain access to personal information of taxpayers such as the Social Security Number to file false tax return and pocket large refunds.

Some of the methods charity scammers use to cheat donors include:

·         Pretending to be a real charity using fake ID, forms and receipts
·         Using names similar to that of legitimate charities
·         Conducting identity theft by forming fake web pages that look like a real charity site
·         Contacting people over the phone to donate or share personal information

Many of the scammers are criminals that see a natural disaster as an opportunity to make money by asking for donations using fake identities. 

Before donating to a charity, it is important to check if the charity is qualified. To know which charities are qualified, the Exempt Organizations Select Check tool on the IRS website can be used. Another advantage of making contributions to qualified charities is that the contributions made are tax deductible.

The safest method to stay secure from scammers is not to share any information, especially financial and personal information such as bank account numbers, personal identification numbers, SSN and tax filing status, if the contact was initiated by the charitable trust. To avoid falling prey to charity scams, only contact charities that you are certain are legitimate. 

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