Top IRS Tax Scams
The Internal Revenue Service (IRS) has reported on the scams that were the most widespread. Some scams are seasonal, but others could occur at any time throughout the year. Con artists are a wily bunch, so now is not the time to let your guard down. Preparation is the best way to prevent identity theft and protect your accounts.
“Phishing” refers to emails or websites that are designed to look exactly like their legitimate counterparts. They could be “impersonating” the IRS, tax software companies or banks. The common link is that they’ll all ask you to enter sensitive information like your date of birth, account numbers or Social Security number.
To dodge these scams, keep an eye out for any solicitations of information. Contact the organization in question by visiting the local branch in person or calling an office phone number listed on their official website. Ask a representative if something fishy is going on. Don’t use any phone numbers from a website that you reached through an email link.
Fraudulent IRS Transcript Collection
Some scammers are using the “get transcript” function at IRS.gov to collect information and ultimately your tax return. They create an account in your name with a fraudulent email and then use the account to access past returns. Using this information, they’ll increase some numbers like income, to make the new filing similar enough to seem legitimate, then collect the return in an account that doesn’t belong to you. Once the money is in their account, they can spend or transfer it as they please, and you’ll be stuck trying to convince the IRS that fraud occurred.
The best way to prevent this is by registering with IRS.gov yourself and setting up the “get transcript” function with your own email (even if you don’t actually use the function).
There have been numerous reports of individuals receiving aggressive, threatening calls from the “IRS” about a debt. In reality, these calls are from impersonators who have gone to great lengths to fool caller ID (so it actually looks like the IRS is calling) and speak as if they’re legitimate tax professionals or officials. Such a call usually involves personal information the scammers have already collected about a target. Also common are threats of arrest, deportation or suspension of various licenses. The target will be told that the only way to prevent these scenarios is to make a payment through a preloaded debit card or wire transfer.
Fortunately, all you have to do to protect yourself in this situation is to recognize such a call, collect their information (in order to report it) and hang up.
Protect Yourself: Recognize and Report
If you encounter any of these scams, you should report them with as much detail as you can to the Federal Trade Commission: https://www.consumer.ftc.gov/media/video-0054-how-file-complaint
It can be extremely difficult to recover from a scam, so it’s best that you be vigilant and try to recognize a scam before you fall victim to one. The IRS provides the following information on IRS.gov to help you see through a tax scam:
Note that the IRS will never:
1) Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill
2) Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe
3) Require you to use a specific payment method for your taxes, such as a prepaid debit card
4) Ask for credit or debit card numbers over the phone
5) Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
Keep this in mind and remember to ask questions any time somebody claiming to be from the IRS (or any other organization) asks you for private information or a payment out of the blue.