Home / General / IRS, Alabama Securities Commission Caution Businesses, Individuals to Beware of Charity and Investment Scams Relating to Hurricane Harvey

IRS, Alabama Securities Commission Caution Businesses, Individuals to Beware of Charity and Investment Scams Relating to Hurricane Harvey

The heart-rending photos and stories of flooded Texas tug at the heart strings for the victims, but at times like these, pause a moment when confronted with charitable requests in order to avoid becoming a victim yourself, the Internal Revenue Service cautioned.

The IRS this week warned about possible fake charity scams emerging due to Hurricane Harvey and encouraged taxpayers to seek out recognized charitable groups for their donations.

And the Alabama Securities Commission warns about fraudulent investment scams.

The IRS said while there has been an enormous wave of support across the country for the victims of Hurricane Harvey, people should be aware of criminals who look to take advantage of this generosity by impersonating charities to get money or private information from well-meaning taxpayers. Such fraudulent schemes may involve contact by telephone, social media, e-mail or in-person solicitations.

Criminals often send emails that steer recipients to bogus websites that appear to be affiliated with legitimate charitable causes. These sites frequently mimic the sites of, or use names similar to, legitimate charities, or claim to be affiliated with legitimate charities in order to persuade people to send money or provide personal financial information that can be used to steal identities or financial resources, the IRS said.

IRS.gov has the tools people need to quickly and easily check the status of charitable organizations.

The IRS cautions people wishing to make disaster-related charitable donations to avoid scam artists by following these tips:

  • Be sure to donate to recognized charities.
  • Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. The IRS website at IRS.gov has a search feature, Exempt Organizations Select Check, through which people may find qualified charities; donations to these charities may be tax-deductible.
  • Don’t give out personal financial information — such as Social Security numbers or credit card and bank account numbers and passwords — to anyone who solicits a contribution. Scam artists may use this information to steal a donor’s identity and money.
  • Never give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the donation.
  • Consult IRS Publication 526, Charitable Contributions, available on IRS.gov. This free booklet describes the tax rules that apply to making legitimate tax-deductible donations. Among other things, it also provides complete details on what records to keep.

Taxpayers suspecting fraud by email should visit IRS.gov and search for the keywords “Report Phishing.”

More information about tax scams and schemes may be found at IRS.gov using the keywords “scams and schemes.” Details on available relief can be found on the disaster relief page on IRS.gov.

ASC Director Joe Borg said as we are seeing in Texas, natural disasters bring out the best in people, with neighbors helping neighbors. “Unfortunately, we know from experience that disasters also can bring out the worst in people, particularly those seeking to profit from the misfortune of others,” Borg said.

He said unsolicited investment offers seeking to capitalize on the aftermath of Hurricane Harvey should be approached with extreme caution.

Like hurricane warnings themselves, there are red flags of hurricane-related scams, including unsolicited email, social media messages, crowdfunding pitches or telephone calls promoting investment pools or bonds to help storm victims, water-removal or purification technologies, electricity-generating devices and distressed real estate remediation programs.

A good rule of thumb: If it’s too good to be true, it probably is:

Delete unsolicited emails or social media messages and hang up on aggressive cold callers promoting hurricane-related investments, especially those from small companies touting unproven or new technologies or products;

Use common sense. Claims of guaranteed returns or low/no investment risk are classic red flags. Every investment involves some degree of risk;

And, do your homework. Contact the ASC at 1-800-222-1253 to determine if both the seller and investment are licensed and registered.

About Dana Beyerle

Dana Beyerle

Director of Communications
(334) 240-8768 | Fax: (334) 241-5984
Email Dana Beyerle

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