New York Attorney General Letitia James is warning residents to be cautious of scams during tax season and to check if they qualify for the IRS Direct File program, which allows eligible taxpayers to file their federal and state taxes for free.
James says scammers often claim you owe past tax debts, insist you pay using a gift card, or falsely state you must return a tax refund. Others offer free tax preparation services only to charge hidden fees.
“The Direct File program is a safe and easy way to file taxes for free and save hundreds of dollars,” James said. “I encourage everyone to be on the lookout for fraudsters who try to take advantage of tax season.”
Common tax scams to avoid
James outlined several fraudulent tactics, including:
- Fake debt collection: Scammers claim you owe taxes and demand payment through gift cards or prepaid credit cards.
- Refund fraud: You may receive a false notice stating your tax refund was a mistake and must be returned. Legitimate tax notices always arrive in writing, not through calls or texts.
- Deceptive tax preparers: Some fraudsters promise free tax services but charge hidden fees or claim to speed up refunds while adding high interest rates.
- Phishing attempts: Unsolicited calls, emails, or texts requesting personal financial information should be ignored and reported.
Direct File can save taxpayers money
The New York State Tax Department estimates that 3.4 million New Yorkers are eligible for the Direct File program, which could save them an average of $260 in tax preparation fees.
Taxpayers with wages up to $200,000 (or $250,000 for joint filers) may qualify. Those eligible should file their federal return first using IRS Direct File before proceeding with New York State Direct File.
How to stay protected this tax season
- Legitimate agencies will never threaten arrest, demand immediate payment, or require payment via gift cards or wire transfers.
- Verify tax preparers through the Better Business Bureau and ensure they sign your return with a Preparer Tax Identification Number (PTIN).
- Review your tax return thoroughly before submitting it to avoid errors or added fees.
New Yorkers who believe they have been targeted by a tax scam can report it to the Office of the Attorney General by calling 800-771-7755 or filing a complaint online.
