TAO Self-help

Tax season is upon us, and while it's a time for many to diligently manage their finances, it's also a period when scams and fraudsters are on the prowl, targeting unsuspecting individuals, including Veterans and their families. According to the Internal Revenue Service (IRS), taxpayers lose millions of dollars each year due to tax-related scams and schemes, making it crucial for everyone—especially Veterans—to stay vigilant and informed to avoid falling victim to these fraudulent activities.

Understanding the threat

Tax frauds and scams come in various forms, from abusive tax providers defrauding clients to schemes involving fraudulent entities and impersonation of IRS officials. Veterans and their families are particularly vulnerable targets, with scammers often exploiting their personal information and circumstances. It's essential to recognize common tactics used by fraudsters, such as sending fake emails or making threatening phone calls, especially during tax season.

Know your benefits

One crucial aspect for Veterans to remember is that VA benefits are tax-free, and there is no federal income tax on VA insurance proceeds. Additionally, Veterans with a service-connected disability rating may be eligible for local property tax exemptions. Understanding these benefits can help Veterans differentiate between legitimate communication from the IRS and potential scams.

Utilize identity protection tools

The IRS has introduced Identity Protection (IP) PINs as an extra layer of security to combat tax-related identity theft. By enrolling in the IP PIN program, taxpayers receive a unique six-digit number to verify their identity when filing their federal tax returns. This not only helps prevent identity theft but also provides added protection for those who have been victims of tax-related fraud in the past. Taxpayers can request an IP PIN annually through the Get an IP PIN tool by verifying their identity.

Before applying for an IP PIN, review the following information:

• This is a voluntary program.
• Taxpayers must pass an identity verification process.
• Spouses and dependents are eligible for an IP PIN if they can verify their identities.
• An IP PIN is valid for one calendar year.
• Taxpayers must obtain a new IP PIN each filing season.
• Correct IP PINs must be entered on electronic and paper tax returns to avoid rejections and delays.

Stay vigilant

While IP PINs offer increased security, it's essential for participants to remain vigilant against scams.

• The IRS will never email, text or call taxpayers for their IP PIN.
• Taxpayers should only share their IP PIN with their trusted tax provider for tax return purposes.
• Taxpayers can report tax-related illegal activities, including IRS-related phishing attempts and fraud, to the Treasury Inspector General for Tax Administration at 800-366-4484.

Additional resources

For Veterans and their families seeking further guidance on protecting themselves during tax season, there are several resources available, including:

• Internal Revenue Service's Information for Veterans page
• Internal Revenue Service's Military Information page
• IRS Free File tool
• MilTax (free tax software and support)
• IRS Reminds Taxpayers: Choose a Tax Professional Carefully
• Tax Scams: How to Report Them