As millions of United States taxpayers file their federal income tax returns, fraudsters from around the globe are patiently waiting for the perfect opportunity to snare their next victim. The flurry of tax filing each spring can make what would typically seem odd appear normal. You should be expecting communication from the IRS requesting additional information or clarification regarding your taxes this time of year, right? Wrong.
Here are four tax scams to watch out for this tax season.
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Social Security Number Scam
Fraudsters succeed by frightening victims into believing that if they fail to perform a specific action, something terrible will happen. For example, you might receive a phone call or voicemail from a “federal agency” threatening to suspend your Social Security Number (SSN) due to back taxes.
You can rest easy. Hang up and block the caller. This is a scam. The IRS does not call or demand immediate payment by threatening to void your Social Security Number.
If you believe you do owe the IRS, log into your account at IRS.gov to confirm how much you owe and review payment options. Moreover, you would have received a letter instructing you of your payment options. You will not receive a call urging you to make a payment immediately using a gift card, prepaid debit card, or wire transfer.
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IRS Email Impersonation Scam
The Internal Revenue Service has confirmed that they “…do not send unsolicited emails and never email taxpayers about the status of refunds.” This hasn’t stopped fraudsters from convincing unsuspecting taxpayers that messages that land in their inbox are legitimate. Enticing email subject lines that include the words “Tax Return Reminder” or “Income Tax Reminder” convince victims to open and unknowingly click on malicious links.
NOTE: Scammers are also using “Tax Transcript” in the subject line and including attachments labeled “Tax Account Transcript” or “IRS Online” to get their victims to release malware on their computer systems.
These unsolicited emails redirect you to an official-looking government website where you have to create or use a one-time password to check on or submit your refund. If you follow the instructions, you may also have to input private information such as your Social Security Number. Even if you don’t provide the requested information, the scammer can steal private data from your computer if you click on links within the email. One-click and you could unknowingly download software that tracks your keystrokes, including the ones you make when accessing your online bank account.
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IRS Telephone Impersonation Scam
The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service. Scammers use this to their advantage by pretending to be a representative of the organization. This scam can be harder to detect since criminals will often spoof the telephone number to a TAS office and request a callback. This means that an automated call may appear to be from an actual TAS office when it’s not. By the time the victim realizes what’s happened, they’ve likely provided their Social Security Number, Individual Taxpayer Identification Number (ITIN), or other personally identifiable information.
NOTE: Social Security Number and IRS Impersonation Scams also try to convince victims they need to provide personal information to receive their tax refunds. They may even offer the last four digits of the SSN or ITIN to convince you they know more about you than they do.
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“Ghost” Tax Return Preparer Scam
Unethical tax return preparers hoping to gain access to your personal information for their own benefit appear this time of year. Paid tax preparers must sign your return with a current year’s Preparer Tax Identification Number (PTIN). But, ghost preparers will come up with excuses for not signing. They tell taxpayers to print, sign, and submit it themselves. Scammers may have no background in tax preparation or authorization to offer tax preparation services due to prior violations. They will often require cash payments and charge fees based on the expected refund amount, then disappear.
If you’re considering using a new tax preparer this year, review the IRS Directory of Federal Tax Return Preparers to find a qualified professional. Remember that taxpayers are ultimately responsible for the accuracy of the information submitted to the IRS. Always review the tax return carefully before filing.
Stay clear of taxpayer scams this season by remembering that the IRS or TAS does not:
- Initiate contact with taxpayers via telephone, social media or text messaging with requests for confidential information
- Threaten arrest for failing to pay immediately
- Ask for debit card, bank account, or credit card information over the phone
- Accept gift cards or prepaid debit cards as payments
- Suggest payment be made to someone other than the U.S. Treasury
Report suspected scam activity by contacting the Treasury Inspector General for Tax Information and the Federal Trade Commission. Learn more about current taxpayer scams by visiting the IRS Tax Fraud Alerts page.