The Season Of Giving Is Also The Season Of Scamming

We are coming into the holiday season, which many people also think of as the season of giving. But this year, you have to be extra careful when selecting to whom you give if you want a tax deduction for your gift come tax time. The IRS is warning taxpayers about the number of bogus charities out there looking to defraud the general public.

Things are so bad that The Internal Revenue Service is teaming up with international organizations and regulators this week to call attention to the dangers of charity fraud. Come to find out it’s Charity Fraud Awareness Week and according to, “there is a team composed of charities, regulators, law enforcement organizations and nonprofits from around the globe with the goal of raising awareness of fraud and cybercrime affecting organizations and to create a safe space for charities and their supporters to discuss fraud and share helpful practices.”

COVID-19, Hurricanes And Other Disasters Fuel The Increase In Fraudulent Charities

It’s not just those who give who are taken advantage of by scammers. As pointed out in the Accounting Today article, “According to the Fraud Advisory Panel, the U.K.-based organization leading the campaign, cybercrime is on the increase, fueled by the COVID-19 pandemic, with charities, their supporters and beneficiaries finding themselves under attack. The panel estimates that the average charitable organization will lose 5% of its revenue to fraud per year. The IRS is partnering in Charity Fraud Awareness Week as part of its ongoing efforts to combat fraud against charities, businesses and individuals.” The article also warns that, “Along with hitting charities with cybercrime, fraudsters are also setting up fake charities, which are again listed among the IRS’s “Dirty Dozen” tax scams for 2021.”

Any disaster that hits a particular area of the country makes that area a target for scammers. The entire world is a target due to COVID-19. Two hurricanes this year, Ida and Nicholas, made Louisiana, Texas, the entire Gulf Coast and New York state targets. And the fires out west have provided criminals with another approach that they will use on unsuspecting taxpayers throughout the entire country. So if you are planning to give to a charity this year, make sure it is legitimate.

The IRS Provides Tools To Help Check The Validity Of Charitable Organizations

If you do give money or goods to a charity you may be able to claim a deduction on your 2021 tax return. But remember, in order to receive a deduction, you must donate to a qualified charity. To check the status of a charity, use the IRS Tax Exempt Organization Search tool.

Here are some tips from the IRS to remember about fake charity scams:

Individuals should never let any caller pressure them. A legitimate charity will be happy to get a donation at any time, so there’s no rush. Donors are encouraged to take time to do the research.
Potential donors should ask the fundraiser for the charity’s exact name, web address and mailing address, so it can be confirmed later. Some dishonest telemarketers use names that sound like large well-known charities to confuse people.

Be careful how a donation is paid. Donors should not work with charities that ask them to pay by giving numbers from a gift card or by wiring money. That’s how scammers ask people to pay. It’s safest to pay by credit card or check — and only after having done some research on the charity.

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