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Tips to Avoid Tax Scams

Tips to Avoid Tax Scams

IRS impersonation scams and other tax scams are prevalent during tax season with scammers trying to trick people into handing over their hard-earned money. Knowing what to watch for is important when trying to avoid tax scams. Scammers may try to contact unsuspecting victims via text messages, e-mails, or phone calls. As an example, a scammer may contact a victim with a legitimate-looking email seemingly from the IRS regarding a tax return or refund. Scammers are looking to lure victims into providing personal and financial information or to steal tax refunds.

Text, email, and phone tax scams

According to the IRS, there was an increase in IRS impersonating text message scams last year. The texts contained fake links tricking people into thinking they were clicking to go to the IRS website. To avoid tax scams, it’s important to remember that the IRS will never use text messaging or social media messaging to contact taxpayers.  Never click on links or open attachments sent via text from someone pretending to be from the IRS or any government agency. If you receive an unsolicited text message or social media message from the “IRS” report it immediately to phishing@irs.gov.

The IRS does not contact taxpayers via email to request personal or financial information. If you receive an unsolicited email that seems to be from the IRS, it is a scammer. The IRS does not leave urgent, pre-recorded, or threatening messages. Scammers can fake or “spoof” a caller ID number to look like it is from anywhere, including and IRS office. If you receive a threatening call, you know it’s a scam.

To avoid tax scams, note the IRS will never:

  • Call to demand immediate payment using a specific method such as a prepaid debit card, gift card, or wire transfer.
  • Threaten to bring in local police or other law enforcement to have you arrested for non-payment. The IRS will not threaten to revoke your driver’s license, business license, or immigration status. These threats are common tactics used by scammers.
  • Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
  • Ask for credit or debit card numbers over the phone.

Tax preparer scams 

Scammers might even pose as tax preparers to steal personal information or a tax refund. For this reason, always do extensive research when selecting a new tax preparer or tax preparation service. Be sure you know who you are hiring.

Tax scams & identity theft

Tax scams can lead to identity theft. Tax-related identity theft occurs when a scammer uses a victim’s stolen social security number (SSN) to file a tax return claiming a fraudulent refund. The taxpayer may be totally unaware until they e-file a tax return only to discover that a return has already been filed using their SSN. If a taxpayer suspects their SSN has been compromised or they suspect they are the victim of tax-related identity theft, they should complete an IRS Identity Theft Affidavit.

Signs of tax-related identity theft

  • A letter comes from the IRS inquiring about a suspicious tax return that you did not file.
  • You can’t e-file your tax return because of a duplicate SSN.
  • A tax transcript arrives in the mail that you did not request.
  • You receive an IRS notice that an online account has been created in your name, or that your existing online account has been accessed or disabled.
  • You receive an IRS notice that you owe additional tax or refund offset or have had collection action taken against you for a year that you did not file a return.
  • IRS records indicate you received wages or other income from an employer you didn’t work for.
  • You’ve been assigned an Employer Identification Number but did not request one.

Don’t be a victim – avoid tax scams 

Tax time is stressful enough without having to deal with a tax scammer. We hope this information helps you to safely avoid tax scams. In conclusion, IRS impersonators may use threats to intimidate victims and bully them into paying fake tax bills or providing personal or financial information. Remember, the IRS will not contact you via text or email regarding your taxes or to request any personal information. Rather, the IRS initiates most contact through regular mail delivered by the United States Postal Service. This includes first mailing a bill to a taxpayer who owes taxes.

In some instances, the IRS may call a home or business. If you’re questioning whether you owe taxes, you can access your individual account information, including balance, payments, tax records, and more on the IRS website.  Tap for details from the IRS on how to report phishing and online scams. Learn more about the steps you should take if you were the victim of identity theft.

Interested in learning when a home equity loan is tax-deductible? Read our Choice One blog post on the topic.




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