IRS Urges Those Hoping To Help To Beware Of Scammers Using Fake Charities

This morning, I woke up to the news that devastating tornadoes swept through Mississippi, killing at least 23 people and injuring dozens more.

The Mississippi Emergency Management Agency tweeted, “Unfortunately, these numbers are expected to change.”

In times like these, of course, taxpayers want to help. But as part of its annual Dirty Dozen campaign, the IRS is urging everyone to be on alert for scammers operating fake charities, especially following major disasters.

Dirty Dozen

The “Dirty Dozen” is an annual list of common scams taxpayers may encounter. Many of these schemes peak during tax filing season as people prepare their returns or hire someone to help with their taxes. The schemes put taxpayers and tax professionals at risk of losing money, personal information, data, and more.

(You can read about other scams on the list this year—including aggressive ERC grabs here and phishing/smishing scams here.)

Disasters Can Attract Scammers

“Following disasters, there are heart-wrenching situations where people want to help,” said IRS Commissioner Danny Werfel.

“But scammers move quickly and use these events to try taking advantage of the public’s generosity, stealing not just money, but personal information that can lead to identity theft. Scams requesting donations are especially common over the phone, as well as by email and texts. Taxpayers should never feel pressured to give immediately, and they should look to recognized, established charities to help victims.”

Not only will fraudsters hope to steal money by posing as fake charities, but they may also be looking to scam you out of personal and financial data that can be used in tax-related identity theft. But you can be charitable following a natural disaster without becoming a victim.

Tips For Staying Safe While Donating

If you’d like to help out, here are a few tips to keep in mind:

• Beware of spoofing. Fake charity-related scams usually start by contacting potential donors via telephone, social media, text message, or email. They may alter or “spoof” their caller ID or email to make it look like an actual charity is contacting you. Ask for the charity’s exact name, website, and mailing address so that you can confirm it independently—and avoid clicking through emails, just type in the name or website of the charity directly.
• Use secure methods to donate. Make sure that gifts made by checks or credit card gifts are secure—and don’t send money by text or apps like Venmo without first verifying the organization and the contact information. If you don’t want to donate online or by text, most organizations have donation forms that you can mail together with a check—never send cash through the mail.
• Take a pause. Scammers often try to convince you there’s an urgent need so that you’ll donate now. If you’re not sure that a charity is legitimate, or if you’re feeling pressure to donate, slow down. If responding to a call or in-person solicitation, offer to take down the contact information and follow up.
• Follow-up. If you decide to make a donation, check out the organization’s credentials. Forbes has a list of the largest charities in the US, with details on revenues, fundraising efficiency, and more. And you can always confirm charitable status through the IRS website using their online tool—remember that some organizations, including churches, synagogues, and mosques, may not be on the list, so don’t be afraid to ask for more information.
• Donations to individuals are not deductible. For federal income tax purposes, you can only deduct contributions made to qualified tax-exempt charitable organizations. Donations to individuals are never deductible for tax purposes, even if they really need the help. But there’s a non-tax reason to use caution, too, when donating outside of charitable organizations: It could be part of a scam. Keep in mind that once you hand over the cash, you have no control over how it might be used.
• Don’t give more than needed. The IRS emphasizes that scammers are searching for money and personal information. Taxpayers should never give out Social Security numbers or PINs, and they should give bank or credit card numbers only after they’ve confirmed the charity is legitimate.
• Check with the organization first. While most organizations prefer cash or cash equivalent, some may solicit in-kind donations. Check with the organization before you show up, send or drop off anything—for example, Volunteer Mississippi is asking private citizens not to volunteer in-person, but if you would like to donate water or resources, the Rolling Fork Civic Center is open to receive them. If you’re planning to claim a tax deduction for any in-kind goods, keep receipts showing what you paid for the items.
• Keep excellent records. Of course, you should always keep records of all donations for tax purposes. And, asking the organization for documentation is a good way to gauge their responsiveness and legitimacy—if they balk at providing a receipt, consider that a red flag.

Looking For Help?

If you have been affected by a natural disaster, help is available. To find out more about disaster recovery, visit DisasterAssistance.gov.

For tax information related to disaster recoveries, check the IRS website. The IRS may grant extensions to file returns and pay taxes (like these for New York winter storm and snowstorm victims), in addition to other relief. You can find more information on the disaster relief page on the IRS website.