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In a recent news release, the IRS issued a warning to taxpayers to be careful about donating to fake charities. While this has always been an issue to some extent, the problem has become more acute of late, as dishonest people look to take advantage of disasters and crises around the world. The IRS advises that you should always check to see if a charity is legitimate before donating money to them.
What Are Fake Charities?
In many ways, a fake charity is exactly what it sounds like: someone purports to represent a charitable organization that either does not exist, or pretends to represent a real charity they are not a part of. These fake charities work hard to convince people to donate to them, and tend to pop up more often in the wake of natural disasters, wars, and other crises. To accomplish this goal, they will use a variety of means to fake legitimacy, including using fake websites, falsified emails, or even “spoofed” phone numbers to make it look like they represent a legitimate organization.
What Are the Dangers of Donating to Fake Charities?
There are three primary dangers that can arise from donating to a fake charity. The first is, of course, that the fake charity takes your money and runs off with it, depriving you of your hard earned wealth for their personal enrichment. The second is that they steal your personal information, such as your credit card details, facilitating identity theft. Finally, you may potentially get into trouble if you try to claim a charitable donation on your taxes that was not made to a recognized tax-exempt charity.
What Are the Signs of a Fake Charity?
There are a few signs that you may be dealing with a fake charity:
- First, you should always be wary of someone seeking charitable donations who seeks more information than they actually need, such as someone who asks for both money and personal identifying information.
- Second, you should always be suspicious of someone who engages in high-pressure tactics to convince you to donate immediately, rather than coming back at another time, which may be indicative of an attempted “sale” rather than a legitimate solicitation.
- Finally, you should always be suspicious of a charity that seeks donations through non-traditional means, such as by wiring money or buying gift cards.
What Should You Do if You Encounter a Fake Charity?
If you encounter a charity and are not certain of its legitimacy, you should first check to see if it is actually registered as a tax-exempt organization through the IRS Tax Exempt Organization Search. If they do not come up, there is a good chance they are not a legitimate charity. If you discover such an organization, you can report them to the FBI’s Charity and Disaster Fraud unit.
