Financial stress and economic anxiety have gripped Americans since the beginning of the COVID-19 pandemic. With financial woes at an all-time high, this can be a perfect time for scammers to con ordinary working people out of their money. This high volume of scamming resulted in a loss of $56 billion in 2020 to predatory scammers.
One type of scam, tax fraud scams, is on the rise. The IRS has issued a warning that tax fraud scams are on the rise.
What Are Tax Fraud Scams?
Tax fraud scams happen when a fraudster files tax returns using stolen information. It’s a form of identity theft. The fraudster then receives money, while the victim suffers financial loss or even legal difficulties. Fraudsters steal information through phishing.
The Oxford English Dictionary defines phishing as “the fraudulent practice of sending emails purporting to be from reputable companies in order to induce individuals to reveal personal information, such as passwords and credit card numbers.” Phishers can disguise themselves as banks, credit unions, loan sharks, or even the IRS.
They prey on people who may lack financial or digital literacy, such as the elderly. However, young people can fall for phishers and get caught up in tax fraud scams, too. The IRS has warned college students to be vigilant when it comes to tax scams.
After all this, it’s simple for the phisher to start a fraudulent tax claim and steal money. Some fraudsters may even force the victim to wire money or buy gift cards as a pretend service fee. There’s no winning for victims of these vicious scams.
The IRS will never reach out by email, phone call, text message, or social media.
What Are Tax Fraud Recovery Companies?
Once the fraud is underway, the victim can be at a considerable loss. Funds and assets recovery is likely one of the following steps for victims who have paid into fake scams and need to regain their money.
Recovering lost funds is where tax fraud recovery companies come in. Tax fraud and asset recovery companies represent the victim and help get back their money.
Asset recovery can be a confusing multi-jurisdictional process. Filing tons of papers, speaking with the IRS, banks, and other agencies can be a time-consuming and challenging task.
A tax fraud recovery company can be helpful for individuals who are busy with work, aren’t confident with their English skills, or lack computer skills.
How Do Tax Fraud Recovery Companies Work?
Asset recovery companies employ lawyers, forensic analysts, and other financial specialists who work together to represent the victim and recuperate funds.
The company will sort out all of the different aspects of the fraud case and initiate funds recovery. They may have to deal with many organizations on behalf of the client. The number of involved third parties may increase when the fraud occurs off-shore and stolen funds go to an off-shore account.
Juggling all the different paperwork and making sure the victim is best represented is the primary goal of the tax fraud recovery company. They aim to make sure that money is regained as soon as possible. This service is for a fee, and various companies have differing rates.
Some of the advantages of using an asset recovery company after being caught up in a tax fraud scam are:
- The company knows what to do. Like how an accountant is knowledgeable about filing taxes, these companies specialize in navigating the legal channels of funds recovery.
- Companies can have creative solutions: someone who isn’t versed in fraud might not have any insight into what has happened to them or where to go next. These companies can think outside the box and come up with a plan of action for funds recovery.
- Tracing assets: scammers may con victims out of funds in multiple venues. The company can trace where these assets went for the victim.
It’s the job of the company to make sure that funds are secured and returned. The victim may also seek advice on where to turn next and how to avoid future scams.
What to Consider
When seeking out a company to assist in money recovery, the victim has a few things to think about:
- Cost: the price is one aspect to consider. These services come for a fee, and different companies may have different rates.
- Area: it may also be helpful to consider jurisdiction. A local recovery company may be able to provide unique insight on scammers in the area.
These services can expedite the whole process of money recovery. With phishing and fraud being so prevalent in 2021, it’s essential to know what options are available for victims of fraudsters.