As tax season approaches, you can bet that fraudsters are ramping up their tax scams to steal from unsuspecting victims. Here are some of the most common scams and how to protect yourself.
The telephone scam
Fraudsters call victims claiming to be from the IRS. They may even leave a message asking for a return call to discuss outstanding taxes due. Often, they will claim that they conducted an audit of your previous tax filings and found errors that led to overdue taxes. They will offer to rectify the situation with an immediate payment over the phone. If the victim does not act immediately to pay the amount due, the thief will start making threats to prosecute the victim in court and/or send the local police to arrest the victim.
The IRS will never call you and make threats, so do not call these numbers back. If you’ve answered the call already, hang up. If you are worried about possible overdue taxes, you can contact the IRS directly by phone or online. Additionally, the IRS would never ask for payment in the form of a wire transfer or prepaid cards. If it doesn’t make sense what you’re being asked for, do more research. Lastly, local police do not answer to the IRS and will not come searching for you.
The phishing scam
Criminals will send emails appearing to come from the IRS and asking for updated account information or asking the victim to click a link and login. The key to a phishing email’s success is a sense of urgency. They will ask for an immediate action and may state that the victim will be unable to file taxes if they do not respond quickly. Links may take the victim to a dummy site that looks somewhat official.
The IRS will never initiate contact via email. Do not click any links and do not provide any personal information. If you have concerns about outdated or incomplete information with the IRS, contact them by phone, mail, or by visiting their website.
The charity scam
Thieves set up make-believe charities and advertise that taxpayers can reduce their taxes due by making charitable donations. Contact might be made in person, over the phone, by email, or social media. Once a donation is received, the charity is never heard from again.
Research any charity before you make a donation. Look up how long the charity has been around. Are there online reviews of their work? Do they have a website and proof of the work they have done? If you are unsure, look to see if there is a more reputable organization you can donate to that serves a similar cause.
The refund scam
Thieves try to file tax returns using personal information they have stolen via any number of ways. If they have social security numbers, address information, and employer information, they could file a return and claim the refund before the victim realizes anything has happened. Victims often discover they have been targeted when they try to file a return and the IRS responds that a return has already been filed and/or a refund has already been issued.
File your taxes as early as you can. As soon as you have all of the forms needed to file, submit your taxes. This allows less time for a thief to file in your name. Additionally, safeguard your information as much as possible year-round. Your social security number is like gold to an identity thief. If you are a victim, follow up with the IRS and the Federal Trade Commission to dispute the fraudulent filing.
For more information about tax-related scams and how to protect yourself, visit irs.gov and ftc.gov.