Tax season can be overwhelming. To add to our worries, a growing concern has emerged: charity scams that exploit our generosity, not only during tax filing but also in the aftermath of natural or man-made tragedies.

The overlap of tax-related considerations and charitable giving presents a unique challenge, and understanding the risks is critical to ensure both financial well-being and meaningful contributions to genuine causes.

Charity Scams During Tax Season

The Internal Revenue Service (IRS), has created its “Dirty Dozen” list of tax scams, sounding the alarm on the use of fake charities to exploit taxpayers. Key insights and warnings from their guidance include:

1. Verification: Taxpayers are strongly encouraged to verify the legitimacy of charitable organizations before making contributions. The IRS and Federal Trade Commission (FTC) provide tools such as the Tax-Exempt Organization Search and Charity Navigator   to help with the verification process.
2. Red Flags and Due Diligence: Scammers often adopt names closely resembling well-known charities, capitalizing on the trust associated with established organizations. Taxpayers are advised to exercise caution, especially with unsolicited communications, and scrutinize a charity’s mission and fund utilization.
3. Securing Contributions: The IRS emphasizes the importance of using secure and recognized payment methods when making donations. Checks or electronic transactions not only provide convenience but also leave a traceable record, adding an extra layer of security.

Post-Tragedy Charity Scams

The aftermath of natural or man-made tragedies often sees a surge in charity scams. Here are some measures to take to defend against such scams:

1. Verification: Natural disasters or tragedies often lead to the creation of fake charities to exploit people’s desire to help. Just as with the tax scams, this reinforces the need for verification even in crises, ensuring that contributions reach legitimate causes.
2. Online Donation Safety Measures: Readers are urged to exercise caution when donating online, ensuring the security of the website through the presence of “https://” in the URL. Avoiding clicking on links in unsolicited emails further safeguards against potential online scams.
3. Resisting Urgency Tactics: Scammers frequently use urgency to manipulate individuals into making impulsive decisions. Legitimate charities understand the importance of careful consideration, while scammers often pressure for immediate contributions.
4. Guarding Against Emotional Manipulation:  Scammers use emotional tactics, such as heart-wrenching stories or images. Individuals are advised to maintain a level-headed approach, verifying the legitimacy of the charity and avoiding decisions driven solely by emotional appeals.

Reporting a Scam

• If you think you’ve spotted a charity scam, report it at https://reportfraud.ftc.gov/

• In the unfortunate event of falling victim to these scams, please follow the guidelines provided by the Federal Trade Commission (FTC) at FTC Identity Theft or visit Identity Theft.

Conclusion: A Call for Vigilance and Due Diligence

As individuals navigate the complexities of tax season and respond to the aftermath of tragedies with charitable giving, it underscores the necessity for vigilance and due diligence. Verifying charities, recognizing red flags, securing online transactions, and resisting emotional manipulation form a robust defense against scams.

Additional Resources

To enhance your awareness and safety when donating to charities, you can refer to the following resources:

·       IRS Dirty Dozen – Fake Charities Scams to exploit taxpayers

·       FTC – How to Donate Wisely and Avoid Charity Scams

·       SANS Ouch Newsletter – Charity and Disaster Scams

These sources offer valuable insights and expert advice on verifying legitimate charities. By adopting these practices, individuals can ensure their philanthropic efforts make a meaningful impact while safeguarding against the pitfalls of charity scams during tax season and in the wake of tragedies.

Learn more about Oakland County’s Information Security Office here. Visit their Citizen Cyber Training portal for online education and online Cyber Security resources to help understand risks and be better prepared for a more secure online experience.

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