Tax Scam

With tax season here, it’s open season for scammers to target you and steal your money, important personal information, or even your identity. In 2021, the IRS reported a 91% increase in identify theft and tax refund fraud. Let’s take a look at what they are doing.

IRS Impersonators will send an e-mail, text, letter, social media message, or contact you via a phone call, impersonating the IRS. This correspondence will appear very realistic and will be related to you and your tax return or refund. Never click a link or open any IRS correspondence that is unsolicited. Remember, the IRS will never initiate contact with you requesting your personal or financial information. They also will never leave a pre-recorded, threatening message on your phone. Scammers are smart and they can fake/spoof ID numbers on phones to make it appear that the call is coming from an IRS office. Please visit the IRS website for more information.

Tax Themed Emails Infect PCs with Malware when a hyperlink is clicked. In this case, fake tax documents are sent via email to unsuspecting consumers. When you click to view the image, malware (malicious code or a virus) is downloaded on to your computer and goes to work stealing personal information. To compound the problem, there is a contact link, from a “reputable company”, to get rid of the malware. If you do click the link, you may end up right where the scammer wants you. They will request payment for their efforts to get the malware off of your computer. It’s one big scam. Make it a practice to never click on links in an email or open an email that you were not expecting.

Tax Preparer Scams have been on the rise in recent years. In this scam, shady tax preparers falsify returns or attempt to sell consumers illegal tax evasion schemes. Frequently, they may refuse to sign the prepared tax return. If there is not a valid signature of the preparer, the IRS will view it as a self-prepared return. These “ghost tax preparers” often require payment in cash and refuse to provide you with a receipt. They may also direct your refund be deposited in their own account instead of having it sent to you and often steal your personal information in the process. The IRS expects you to do your due diligence which includes making sure that the person preparing your tax return has a PTIN (Preparer Tax Identification Number). The IRS does provide a directory of federal tax preparers.

Overdue Payment Scams target individuals after they have received their tax refund. They will again appear to be contacting you from the IRS. They claim that your return was not correct and that the tax refund you received was too much. They demand that you return the extra funds via a wire, gift cards, or cryptocurrency. Ignore these threats. As suspicious as this might seem, people fall for this scam. The IRS will only contact you via mail correspondence, if this is the case, and will accept various payment options. Always verify an overpayment with the IRS before paying it back.

Important IRS Tip: Yes, it might be scary to deal with the IRS. If you owe the IRS (or think you owe the IRS), they will first mail correspondence to you as a taxpayer. All payments should only be made to the U.S. Treasury and will never be sent to a 3^rd party. You can view tax account information online at IRS.gov to confirm the actual amount you owe and see various payment options. You can also contact the IRS directly at (800) 829-1040.

Takeaways to protect your information include:

Do not respond to any text from someone you do not know. This includes a reply that says “Stop” or “No”.
Never click on hyperlinks, attachments, or images in messages (email or text) where you do not know the sender.
Utilize smartphone features to filter out or block unsolicited or unwanted messages before they appear on your phone.
Delete any suspicious text immediately. Scammers very effectively masquerade as well-known and respected organizations and companies.

Sources: irs.gov- aura.com/learn/tax-refund-scams - aarp.com/money/scams-fraud.