It’s tax season, which means that tax scams are on the rise. It’s likely you – or someone you know – has received a suspicious email, phone call or even snail mail and wondered “can this be real?” If you answered “no,” congratulations! You just saved yourself a mess and headache. But unfortunately, thousands of Americans lose millions of dollars as well as their personal information to tax scams each year, according to the IRS.
It’s why the IRS regularly issues “Scam Alerts” to warn taxpayers against the potentially damaging scams. What’s even more alarming is that rip-off artists working to rid you of your money or your identity are finding increasingly clever ways to reach into your pocket. In addition to ordinary taxpayers, scams now target tax professionals, human resource/payroll departments and others. Nearly any entity that might possess your private information can be subjected to a tax scam.
Most recently, an IRS Scam Alert warned of a complex scam where criminals steal client (i.e., taxpayer) data from tax professionals and then file false tax returns under these clients’ names, using the clients’ real bank accounts for refund deposits. Scammers then use a variety of different methods to take back the money once it’s deposited – sometimes even posing as IRS officials and threatening the victims. You can read the full Scam Alert here.
So, what can you do to protect yourself? The first step is to know how the IRS operates and to become somewhat familiar with the types of scams out there (although they are constantly changing and adapting):
IRS protocols. The Internal Revenue Service will NEVER initiate contact with taxpayers by email, text message or social media platforms to request personal or financial information. If this happens to you, it’s a surefire sign someone is trying to scam you.
Deceitful practices. As mentioned above, tax scams come in all kinds of forms – and are delivered to victims in snail mail, email, text message or phone calls. Don’t be fooled by professional looking letterheads and logos or official sounding tax issues raised in the communication. If you have any doubt at all as to its authenticity, do not respond in any way and contact someone you trust to verify the communication.
Variety of scams. As the earlier example demonstrates, scam artists are a clever bunch. There are a variety of ways they will try to wriggle personal information out of you. Whether by asking you to provide private information (“phishing”), impersonating IRS personnel via telephone calls or directing you to official looking websites that infect your computer with malware (making you vulnerable to hacking), criminal scammers will stop at nothing to steal your money.
So consider this a primer to the basics of tax scamming you need to know to protect yourself and your private information. Remember that the IRS will not contact you and request private information arbitrarily via email or text. And finally, always say no to information requests that you are not absolutely, 100 percent positive are authentic.
To get more information about tax scams and how to identify them, read this comprehensive IRS Tax Scam Alert.