IRS Warns: Beware of Fake Charities; Verify Before Donating

In the wake of the tragic crises and natural disasters happening around the globe, the Internal Revenue Service (IRS) has issued a warning to taxpayers. It urges caution against criminals posing as legitimate charities soliciting donations. When fraudsters operating under the guise of fake charities scam unsuspecting donors, the donations do not reach those who genuinely need help. Moreover, those who contribute to these false charities cannot deduct their donations on their tax returns.

A Message from IRS Commissioner Danny Werfel

“We all want to help innocent victims and their families,” stated IRS Commissioner Danny Werfel. “Knowing that we are trying to assist those suffering, criminals emerge from the shadows to prey on the most vulnerable – people who simply want to help. Especially in these challenging times, don’t feel pressured to donate immediately to a charity you’ve never heard of. Research the charity first and confirm its authenticity.”

How to Verify a Charity

Those wishing to donate should use the Tax Exempt Organization Search (TEOS) tool on the IRS.gov website to find or verify legitimate and qualified charities. With TEOS, individuals can:

– Verify the legitimacy of a charity.
– Check its eligibility to receive tax-deductible charitable contributions.
– Look up information about an organization’s tax-exempt status and tax returns.

Furthermore, the IRS encourages anyone who encounters a suspicious or fake charity to consult the FBI’s resources on charity and disaster fraud.

Fake Charities: A Criminal Strategy

Criminals often create fake charities to exploit public generosity during international crises or natural disasters. Typically, they seek money and personal information, which can be used to further victimize individuals through identity theft.

Promoters of fake charities may use emails, counterfeit websites, or alter or “spoof” their caller ID to appear as if a real charity is calling for donations. Criminals often target older individuals and groups with limited English proficiency.

Here are some tips to protect yourself from scams related to fake charities:

Protecting Yourself from Fake Charity Scams

– Verify first. Scammers often use names that sound like well-known charities to confuse people. Donors should ask the fundraiser for the exact name of the organization, website, and mailing address to independently confirm the information. Use the TEOS system to verify if an organization is a legitimate tax-exempt charity.

– Don’t give in to pressure. Scammers often pressure people to make an immediate payment. On the other hand, legitimate charities are happy to receive a donation at any time. Donors should not feel pressured.

– Don’t give more than necessary. Scammers are hunting for both money and personal information. Taxpayers should treat personal information like cash and not give it to just anyone.

– Be wary of how a donation is requested. Never cooperate with charities that request donations by asking for gift card numbers or money transfers. It’s a scam. The safest way is to pay by credit card or check, and only after verifying that the charity is real.

Taxpayers who donate money or goods to a charity can claim a deduction if they itemize deductions, but these donations only count if they go to an IRS-recognized organization.