The IRS continues educating taxpayers on the “Dirty Dozen” most common tax scams during tax season. Next on its list: Fake Charities.

On average, more than one-fourth of all tax filers itemize charitable deductions on their returns. And, why not? Charitable deductions offer a way for them to reduce their taxable income, while also supporting organizations or causes that they believe in.

But, don’t be surprised if it turns out that your client has been duped. There are plenty of groups out there that masquerade as charitable organizations, designed to attract “donations” from poorly informed contributors. So many, in fact, that the IRS has added “fake charities” to its list of Dirty Dozen tax scams for 2015.

Illegal scams can lead to significant penalties, interest and possible criminal prosecution, and IRS Criminal Investigation works closely with the Department of Justice to shut down scams and prosecute the criminals behind them. But, there are steps that taxpayers can take to avoid being scammed by a fake charity.

If your clients have questions about what they can do, I’d suggest the following tips from the IRS:

  • Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. has a search feature, Exempt Organizations Select Check, which allows people to find legitimate, qualified charities accepting tax-deductible donations.
  • Don’t give out personal financial information, such as Social Security numbers or passwords, to anyone who solicits a contribution from you. Scam artists may use this information to steal your identity and money. People use credit card numbers to make legitimate donations, but your clients should be very careful when they are trying to donate to someone who called them.
  • Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.

Note that your clients are more likely to be susceptible following a significant natural disaster, when interest in supporting affected victims and their families is highest. After Hurricane Katrina, for example, law enforcement officials saw an unprecedented spike in fraudulent charities and organizations claiming to raise money for recovery funds.

Editor’s Note: This is post seven of a 12-part series covering the IRS “Dirty Dozen” tax scams. Read other “Above the Forms” postings on Intuit® Accountants News Central.

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