Don't Mess With Taxes

Here are 12 scam avoidance tips, six for catastrophe victims and six for those who want to help.

Tropical Storm Beta hanging off the Texas Gulf Coast Monday, Sept. 21, afternoon. Image courtesy the National Oceanic and Atmospheric Administration (NOAA) National Hurricane Center (NHC).

The Atlantic hurricane season has already made the record books. Fires are devastating vast areas of the Western United States. Unusual weather events like the Midwestern derecho have wrecked homes and businesses.

That means millions of folks are looking for help.

There are many sources of assistance, from charitable organizations to help people deal with a disaster's immediate aftermath to government programs that provide transition relief to professional services to get homes and businesses back to pre-catastrophe shape.

Unfortunately, not all help is on the up-and-up. Criminals routinely take advantage of disasters to bilk both victims and those who want to help.

Don't become a double victim: The only thing worse that enduring a major disaster is becoming a victim a second time at the hands of a con artist.

If you're dealing with a disaster's aftermath, these six tips can help save you from additional financial damage as you seek to recover.

1. Avoid clean-up and repair scams. As soon as the weather and roads clear, crooks start cruising damages streets, touting services to help repair homes. All of us who've been through destructive events understand the desire to get your property repaired as quickly as possible, but know how
2. Be skeptical of immediate clean-up and debris removal offers. Some may quote outrageous prices, demand payment up-front, or lack the skills needed.
3. Check out any purported providers of services. Yes, it won't be easy if you're in a particularly hard-hit area, but you need to verify that the offer is for real. Before you pay, ask for identification, licenses, and proof of insurance. And don't believe any promises that aren't in writing.
4. Be cautious when paying. Never pay in full in advance. Similarly, never make the final payment until the work is done and you're satisfied. (This is good advice in non-disaster times, too.)
   If you've received an insurance check to help with your repairs, don't sign it over to a contractor. Instead, arrange with your bank for a Certificate of Completion. The bank will pay the contractor for each stage of the job only after you have given your okay. And never pay by wire transfer, gift card or in cash. Crooks regularly use these payment methods to get your money quickly and then disappear.  
5. Be wary of agency impersonators or facilitators. In the wake of disasters, some crooks purport to be from Federal Emergency Management Agency (FEMA). These fake FEMA employees then require your Social Security number and demand you pay an application fee by providing a credit card and/or bank account information. FEMA doesn't charge application fees.
   Similarly, self-proclaimed disaster recovery experts tend to show up at disaster site, saying they can walk folks through the state and local steps of getting government help … for a fee. You don't need them. FEMA and state officials will help you through the process without any charge.
   Also be similarly skeptical of folks who want to help you fill out tax claims for disaster relief. Such unsolicited offers are likely from crooks, who will take all that personal info you need to file for a disaster tax help and use it to steal not only that cash you need to rebuild, but also your identity. If you do need help to make a disaster tax loss claim, find a real tax pro who can help you.
6. Keep an eye out for rental scams. Temporary housing typically is at a premium following any disaster. It's tempting to take the first place you can find, but steer clear of people who tell you to wire money or ask for security deposits or advance rent before you've met, seen the property or signed a lease.

Don't become an indirect disaster victim: The people who've endured disasters are prime scam targets, but they're not the only ones.

World Central Kitchen volunteers provide boxed meals to California firefighters battling the flames across that state.

Crooks know that generous folks who want to help in times of trouble also make great scam victims. If you're one of the well-meaning who want to help, here are six more tips to help keep you from becoming an ancillary disaster victim.

1. Be wary of offers from all sources. You're leery of the text message seeking money to help hurricane victims, but that well-designed website looks real. Maybe. Maybe not. Fake charity schemes take many forms and con artists push them out on all platforms. Solicitations for "help" show up as telephone, social media, email or in-person requests for disaster relief money.
2. Know your charities. Phony charities also pop up after every disaster, many with names (and fake websites) that are amazingly similar to familiar or nationally known nonprofits. While some legitimate disaster-specific charities may be created, be wary of any that sound like or purport to be a new special part of another charity. Legitimate national charities, such as the Red Cross or Salvation Army or United Way, incorporate any disaster-specific donations into their organizations' overall efforts. They don't create a new charity for each disaster.
3. Check out the charities. If you suspect anything is not quite right, don't give. Take your time to find a real charity that will put your contributions to good work. You can check out a charity using the Internal Revenue Service's online Exempt Organizations Select Check. With a simple online search, you can verify whether an organization is a legitimate, IRS-qualified nonprofit. Also check out Charity Navigator, GuideStar and National Voluntary Organizations Active in Disasters.
4. Don't give out personal financial information. Some crooks don't ask for money. They are playing a longer con, seeking to steal your identity by asking for your Social Security number, your credit card and bank account numbers, as well as passwords to your financial accounts. Don't share this with anyone seeking your help for disaster victims. Real nonprofits do not need all these personally identifying details when you donate.
5. Don't donate cash. Not only is giving currency an easy way to lose your money, it won't do you any good if you plan to deduct your donation. You need substantiation for deduction purposes, and that's available through copies of checks or credit card receipts showing your charitable gift details.
   You also can substantiate your donation the IRS-preferred way: by getting an official receipt from the charity. If an organization isn't prepared or doesn't want to give you a receipt, or gives you one that doesn't have the charity's details on it, that's a warning that it's fake.
6. Be cautious when it comes to crowdfunding. Crowdfunding is popular way to raise money for good causes. Even some government agencies use this option. But it also makes it easy for crooks to steal your money, especially when it features a heart-rending story of loss from a disaster victim. Before you donate to a crowdfunded disaster site, make sure it's not a scam by:
      — Checking credentials: Many crowdfunding sites verify that the person has a Facebook page, but anyone can make one. Take a few minutes to analyze the Facebook page. Are the friends real? Is there a long history of real-time comments? Does the person have just one social media site or are they listed on other sites? A short timeline might indicate that the page was created just before asking for funding.
      — Checking pictures. Google's reverse image search can help you see if the pictures on the site originated elsewhere. This is a good tool to use when a social media account looks a little perfect.
      — Being suspicious: Is the person trying to fund the same project on multiple crowd-sourcing sites? That could show an attempt to raise as much money from as many people as possible.

That last crowdfunding tip is a good one to follow in disaster and regular situations. Nowadays con artists are always on the lookout for ways to steal money, tax refunds and our identities. Don't make it easy for them.

Safety first for everyone: Finally, as we deal with the recent natural disasters, and those that are sure to come, take steps to protect yourself, before and after.

The ol' blog's special Storm Warnings pages, with collections of posts offering tax (and more) advice on preparing for, recovering from and assisting those who sustain damages, can help. A preview of the items is listing in the "of interest" section below.

Most of all, be and stay safe. Recovery is a hassle, but it can be done as long as you make sure you and your family come through the storms.

You might find these items of interest:

• File major disaster claims on Form 4684
• A pre-disaster inventory can pay off when filing insurance or tax claims
• IRS and other government resources can help you deal with a natural disaster

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