 Internal Revenue Service IRS Tax News! People should donate carefully after a disaster to avoid scams. But first, an attempt at a joke. I'm of the opinion that it's better to teach a man or woman to fish. Thanks! Hey, teach a man to fish, huh? But at least the administration tried something after unnecessarily shutting down the economy for way too long. Larry, I don't know what to tell you. If their clothes are closed. By giving every man, woman, and child a fish. A little gift. A gift. Right? But it turns out that fish wasn't a gift after all. But it's not a gift to anybody. Instead, alone. The administration now taking the equivalent of at least five fish back. You didn't say no take-backs. Through an inflation tax. Who would have guessed? In the future, looking back, we may find the administration gave out the equivalent of a sardine. In the form of a few thousand dollars. Just to turn around asking for a five hundred pound tuna in return. It's just a lousy rip-off. In the form of an inflation tax. Interest, you see. And I thought the gas stations were supposed to be the price gougers. I'm starting to think we're the fish round here. You're not a fish. You're a man. IRS tax tip twenty twenty two dash one one nine August fourth two thousand twenty two after an emergency or disaster people rally to help victims by donating money. Unfortunately, this can give criminals an opportunity to prey on them by soliciting donations for fake charities. And we've seen this kind of thing going all the way through the COVID-19 crisis where people basically acted as charities, for example, to take advantage of people during that time. As well as a tick up in things like identity theft to do things such as trying to get access to the stimulus payments or to get access to filing tax returns fraudulently so they can get access to the increase in the refundable credits and that kind of thing. So when we're trying to give help or give aid, then we want to make sure that we're doing so in such a way that it's actually going to be helpful in the long run as opposed to either ineffective or worse harmful. So scammers may also pose as federal agencies to dupe disaster victims trying to get disaster relief. People should always be suspicious of unsolicited contact. So anytime someone's going to obviously contact someone whenever a scam is in place, it usually involves something like a crisis and there's there's a limited time that you need to basically act and there might of course be social pressure as well. And so clearly usually when people are asking for money, you'd like to say, okay, let's take a step back for a second. Let me do a little bit of research and think about it instead of acting completely on the spot, which is typically going to be more of a reactive or emotional response, which is what the scammers typically depend on or try to engage in. So scammers often contact their possible victim by telephone, social media, email or in person. People donating to charity should make sure their money is going to a reputable organization. So clearly when we're researching on where we're going to be putting our money, notice oftentimes from our perspective, just giving the money is the thing that makes us feel better and we give money because it makes us feel good. So even if the money is not being used efficiently, we still get kind of like that relief type of feeling if we feel like we've donated. But clearly we would like to take the due diligence to make the money go somewhere where it's actually going to be effective. So we could do research on the organizations that we're giving money to. If someone asks you to give them money, then you probably want to at least check them out to see if they have a website to see if they're a legitimate charity. And even that, even if they are a legitimate charity, you could dig in deeper than that because just by being in compliance to be a charitable organization doesn't mean that they're running efficiently because charities, because they're not profit oriented, actually have more tendencies to become more bloated because they don't have the market pressure. The people giving to charities, in other words, are not trying to pressure the charities to make sure that they're doing their job like they do with corporations when you invest in stocks, for example, because you're expecting a return on the stocks, you're not expecting anything from the charity, and therefore if they start bloating spending too much money on management, hiring people and so on and not getting the money going to where it should be going, relief and charity in some ways, then that they're not running efficiently, right? So it'd be good if you did the research and tried to find a charity that's actually good at doing the thing that they're supposed to be doing and running efficiently to do it. So thieves may pose as a representative of a charity to ask for money or private information from well-intended taxpayers. Scammers may set up bogus websites using names that sound like real charities. So clearly you want to do more research on your own double checking that the charity is legitimate. When a taxpayer searches for a charity online, they find a fake website or social media page instead. So unfortunately you could find a website that looks quite legitimate, so you got to do a little bit more digging than just noting that they have a website. If they don't even have a website, you would think that they're not legitimate, you would think. So donors can use the tax exempt organization search. There's a link to that here to find or verify qualified charities. So a qualified charity for tax purposes means that they've qualified for tax relief, and therefore that's one way that you can check that they're a qualified charity. Donations to these real charities may be tax deductible, so you could get a tax benefit from it. Taxpayers note that that tax benefit is somewhat limited, however, so if you're taking the standard deduction, you may be able to get some benefit from it, but usually most of the bigger tax benefit that you donate a lot would be on the Schedule A if you were to be itemizing on the federal side of things at least. So taxpayers should also always give by check or credit card to have a record of the donation. So when you're giving money, usually you want to be able to track that the money is being spent. That way you can report it on the taxes. Now reporting on the taxes might not be the most important thing. So if you give money to like a random person on the street or something, you give them cash, it is what it is. But if you're giving to an organization, then you want to make sure the organization is legitimate and you want to be giving them a payment that can be tracked for one, so that you can track it for your taxes. And two, because if they're asking for money from you in the form of cash or a gift card, that's a huge indication that they're not legitimate because they don't want the money to be tracked and usually the people that don't want money to be tracked are scammers. So if someone asks for money in a way that is not trackable, that should raise some bells saying, you know, this person may not be legitimate. So donors shouldn't give out personal financial information to anyone who asks for money. This includes things like social security numbers, credit card information, bank account numbers and passwords. So clearly they can use this kind of crisis as well as we've seen in the COVID kind of thing to try to do the phishing email types of things and get information to their personal information so they might be able to use it to file fraudulent tax returns or do something like that. Disaster victims should know scammers may claim to work for the IRS. So this another strategy within scamming will typically be a fear factor so to have some kind and you have to act quickly or else type of thing. IRS is clearly quite an intimidating organization so they could pose as the IRS. These states they can help victims file casualty loss claims and get tax refunds. So that seems like a cruel thing to do but there's that. Disaster victims can call the IRS disaster assistance line at 866-562-5227. I won't read that multiple times but there'll be a link to this in the description if you want to check it out. IRS representatives will answer questions about tax relief or disaster related tax issues. More information are at the links below. We have the National Center for Disaster Refund DisasterAssistance.gov Publication 3067 IRS Disaster Assistance Federally Declared Disaster Area. There's links to all that stuff here. You can check out the phone numbers and what if you want to look at that and there'll be a link to this in the description.