By Sara Beggs, Exponent Philanthropy
The following was adapted with permission from “Tax Scams: IRS Suggestions That Could Help Protect Your Foundation,” in O’Connor Davies’ February 2014 Private Foundation Newsletter.
Unfortunately, foundations, like individuals, can be the target of identity theft. And what better way to get financial information from your foundation than by posing as the Internal Revenue Service (IRS) at tax time. Due to the increase in tax filing at this time of year, the IRS reports a direct increase in the number of scams using its name.
Because tax scams can take many forms, filers should be vigilant about any communication that is purportedly from the IRS. Perpetrators use various methods of communication, such as email, traditional postage mail, and even phone impersonators.
The IRS offers the following suggestions to help protect your organization against identify theft and other scams:
- Do not leave documents containing your foundation’s employer identification number (EIN) unprotected or available to individuals who should not be privy to such information.
- Provide your EIN to outsiders only when it is required.
- Protect all of your foundation’s financial information from individuals who should not be privy to such information.
- Check the foundation’s credit report every 12 months for suspicious activity.
- Secure all identifying and sensitive information in your office.
- Protect your office computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
- Do not give sensitive information over the phone, through the mail, or via the Internet unless you have initiated the contact and are certain of the recipient.
Note: The IRS does not initiate contact with filers through email, text messages, or social media channels to request identifying or financial information. The IRS also does not request EINs, passwords, or similar confidential access information for credit card, bank, or other financial accounts.
If your foundation receives an email that appears suspicious or from a perpetrator, you should not open any of the attachments or click on any links contained in the email message. Instead, the IRS reccomends that you forward the email to [email protected] for the IRS to investigate. The IRS website provides additional information on how to report phishing scams and additional items to look out for to protect your foundation against identity theft.
Our thanks to Tom Blaney, CPA, CFE [email protected], Chris Petermann, CPA [email protected], and Michael Koenecke, [email protected], of the Private Foundation practice at O’Connor Davies. O’Connor Davies, LLP is a full service Certified Public Accounting and consulting firm that has a long history of serving clients both domestically and internationally and providing specialized professional services of the highest quality.
Related resources
Exponent Philanthropy’s Tax & Legal FAQs
Foundations 101 | May 22, Lansing MI, an opportunity to get up to speed on foundation essentials
Senior Program Director Sara Beggs focuses her time and energy on Exponent Philanthropy’s Getting to Impact Initiative, an effort to equip philanthropists with the information and inspiration to achieve greater impact over time. Her greatest philanthropic joy is participation in Blooming Kids for Kindness, a group of ten families who encourage their children to care about their communities and recognize that each can make a difference through local and international volunteer and fundraising activities.
