Don't Mess With Taxes

Watch out! Hurricane shark! 

Photos like this show up every time sea water rushes into streets.

And here's the YouTube version.

At least Hurricane Ian prompted a new fake shark image. I was getting tired of the Great White alongside an auto.

UPDATE, Sept. 28, 2022, 7 p.m. CT: The fish apparently is real, with some marine experts saying it could be a juvenile shark. 

What isn't up for debate, though, is the post-storm scams. They are real, and remain the same.

Scammers cause further disaster injuries: After every disaster, unscrupulous folks take advantage of people whose lives have been at best dramatically disrupted, at worst destroyed. They promise quick repairs and/or help in maneuvering storm assistance red tape to storm victims.

And they are already out there, even before many people in Hurricane Ian's path have had a chance to fully evaluate their situations.

The hubby and I went through a couple of hurricanes when we lived in Florida. They weren't anywhere near Ian's intensity, and our damages were not nearly as bad. But it was discombobulating. And we were eager to do whatever we could as quickly as we could to try to return to a normal life.

We were lucky. A neighboring couple's job was taking care of snowbird properties. They had been in South Florida for decades, so they talked us through what had and likely would happen next. Even better, they had legitimate connections to get repair work started at the homes they oversaw, and they added ours (and theirs) to the list. Without Jack and Regina, we might have made some quick and bad post-hurricane recovery choices.

So based on our experience, my first suggestion is to take a minute— or more; actually, take all the time you need — to get back some emotional stability and perspective. Some things do need immediate attention. Others can wait a bit.

Then review these 9 tips, culled from our personal experiences, the Federal Trade Commission (FTC), and Internal Revenue Service, on what to do after a disaster and how to spot the inevitable clean-up and repair scams that follow.

1. Be wary of crews showing up to clean up. After any disaster, unlicensed contractors and scammers appear with promises of quick repairs, clean-up, and debris removal. Some may demand upfront payment and not do the work. Others may claim you'll get a discount but quote outrageous prices, or lack needed skills. Listen carefully to what they are promising and asking for the work. Don't hire them on the spot, even if they say that's the only way to get the disaster clearance deal.

2. Check out all crews offering disaster deals. Ask for IDs, licenses, proof of insurance, and references. See if local contact info is on their trucks, and whether that's a hastily-made stick-on sign or a permanent professional paint job. Also check with state and local consumer protection offices for complaints.

3. Be alert for government imposters. Some groups making the rounds after disasters purport to be government officials. Some pretend to be government officials, safety inspectors, or utility workers, who'll say immediate work is required, and, lo and behold, they know just a crew that can do the job. Demand to see their government and/or utility service identification cards.

And when it comes to IDs, don't fall for imposters who say they must get your bank account and/or Social Security number for work to start.

Another common government official ruse is scammers who offer to help you navigate the Federal Emergency Management Agency (FEMA) relief process … for a fee. FEMA doesn't charge application fees. If someone wants money to help you qualify for FEMA funds, they're likely pocketing that money.

4. Get more than one estimate. Yes, I know you want your home or business repaired now. But the unsolicited crews roaming disaster areas aren't the only ones who can do the job. You're usually better off asking people you trust (like we did with our former Florida neighbors) for recommendations. Then get at least two estimates for the work.

5. Get it in writing. That old saying about a verbal contract being only as good as the paper it's written on is true for a reason. Handshake deals usually don't work out as you hope. So get the proposed work details in writing. Then read the contract carefully. If you don't understand something, or a provision is unclear, make the contractor spell it out before you sign.

Also, note whether the contract is transferable. That helped us sell our South Florida home. Back in 2004, we were in the in the paths of Hurricanes Frances and, three weeks later, Jeanne, back in 2004. But since the Sunshine State was landfall for four 'canes (ours were numbers 2 and 4; Bonnie, a tropical storm, also hit the state first) that year, construction supplies were hard to find, as were work crews. We were still waiting for repairs to start months later when we decided to move back to Texas. Our transferable repair contract (and down-payment) was one reason buyers chose to bid on our house.

6. Never pay all up front. Yes, construction companies need money to buy supplies and hire crew. But if they don't have enough reserves and say they need the full agreed upon price before starting any work, be suspicious. These are the crews that likely won't show up after the check clears.

7. Never pay in cash. Now about that check payment…. Your better move is paying by credit card, both as down-payment and when the job is finished. Credit card issuers usually have procedures to protect you against illegally obtained or unsatisfactorily completed jobs. Even if a contractor agrees to a partial payment, if you pay in cash, an unscrupulous repairman could take those dollars and disappear.

8. Don't fall for rental scams. Many people will find their homes uninhabitable. If they don't have friends or family who can make room, they'll need to find temporary housing. Con artists know this, and rental listing scams tend to pop up in disasters' wakes. Steer clear of people who tell you to wire money or who ask for security deposits or rent before you've seen a property, signed a lease, or sometimes, thanks to the internet, have even met.

9. Check out federal tax relief. Any day now, the Internal Revenue Service will issue the relief it's making available to Hurricane Ian victims. That will include extended deadlines, as well as an option to get tax relief for uninsured major disaster losses. This casualty claim on Form 1040's Schedule A can help you get tax refund money to make repairs. You also have options of when to claim it, either on your 2022 return you file next year or on your 2021 taxes. My earlier post on what to consider when making a major disaster tax claim has more on how to make such disaster claims.

Additional disaster resources: You can keep track of disaster declarations and IRS relief here on the ol' blog. You also can go straight to the IRS' online resources.

At IRS.gov you'll find the agency's regularly updated Tax Relief in Disaster Situations web page; the IRS' Topic No. 515 discussing casualty, disaster, and theft Losses; IRS frequently asked questions for disaster victims; and IRS Publication 547, with details on claiming losses related to casualties, disasters, and thefts.

My post IRS and other government resources can help you deal with a natural disaster also has, per the headline, links to some of the additional online government agency disaster resources.

There's also, shameless plug alert, the ol' blog's special pages that comprise the Storm Warnings feature. After that introduction page, you can check out the five additional pages of posts with information on storms and disasters:

• Preparation,
• Recovery,
• Donations,
• General storm stories and information and
• More disaster resources.

Finally, if you encounter a disaster (or other) scam, or fall victim to one, the FTC offers myriad advice for those in such situations.

Tumblin' sharks: Doctored images and videos of sharks in hurricane flooded areas are the internet’s version of the schlocky cable TV Sharknado movie series. If you're not familiar with the films, check out my post No hurricane sharks, but land shark scammers at my tumblr blog Tumbling Taxes. It has a Sharknado highlight reel.

Blog Preview: Storm victims aren't the only scam targets after disaster strikes. Crooks also take advantage of people who want to help folks who've suffered through natural calamities.

Come back to the ol' blog tomorrow for tips on common disaster-related charity scams, how to avoid them, and ways you can legitimately help those in Florida, and soon South Carolina, who have been or will be pummeled by Hurricane Ian. 

UPDATE, Friday, Sept. 30, 2022: As promised, the charity scams post is live!

In the meantime you also might find these items of interest:

• Don't be lulled by slow 2022 hurricane season. Prepare now
• Feb. 15, 2023, new tax deadline for hurricane-hit Puerto Rico
• FEMA wants to end flood insurance for repeatedly doused areas

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