Now that the deadline for employers to mail W-2 Forms and businesses to furnish 1099 Forms reporting compensation, bank interest, dividends, and retirement plan distributions has passed, Americans are working to prepare their taxes in preparation for the April 15th Federal Income Tax deadline.
Each year during tax season, thousands of people lose millions of dollars and their personal information to tax scams. These scammers use the U.S. mail, telephone, and email to target individuals, businesses, payroll, and tax professionals. Here at Guardio, we want to make sure that you know the telltale signs to look for so that you can recognize and avoid falling victim to tax season scams.
The IRS doesn't initiate contact with taxpayers by email, text, or social media.
Scammers impersonate IRS officials in person, over the phone, and by email. The IRS initiates most contacts through U.S. mail delivered by the United States Postal Service. Only under certain circumstances will the IRS call or come to a home or business. These circumstances include overdue tax bills, to secure a late tax return, employment tax payment, or to tour a business as part of an audit or during a criminal investigation. Before reaching this point, however, taxpayers will first receive several letters from the IRS in the mail.
The IRS will never:
- Demand immediate payment using a specific payment method like a prepaid debit card, gift card, or bank transfer. They will mail a bill to any taxpayer who owes taxes.
- Demand that you pay taxes without allowing you first to question or appeal the amount they say you owe. They will always advise you of your rights as a taxpayer.
- Threaten to have you arrested by bringing in police, immigration officers, or other law enforcement personnel.
- Threaten to revoke your driver's license, business licenses, or immigration status.
These are all tactics scam artists use to scare victims into providing payment and sensitive data.
If you owe taxes, the IRS instructs taxpayers to make payments to the United States Treasury. They provide specific instructions for taxpayers who need to make a payment at https://www.irs.gov/payments.
IRS representatives who visit in person will always furnish two forms of official credentials. These include a pocket commission and an HSPD-12 card. You have the right to ask to see these credentials and can verify information from the HSPD-12 card by calling a dedicated IRS telephone number. These IRS collection employees will never demand immediate payment to a source other than the U.S. Treasury.
Scams Targeting U.S. Taxpayers
Scammers use robocalls and claim to be able to suspend or cancel the victim's SSN. They may mention overdue taxes or other debts. If you ever receive a call threatening to suspend your SSN for an unpaid tax bill, hang up or delete the voicemail message.
Scammers create phishing emails notifying taxpayers of taxes owed or refund status. The emails include a link that leads victims to a malicious website that looks similar to the IRS website with details pretending to be about the victim's tax refund, electronic return, or tax account. The emails contain a "temporary password" or "one-time password" needed to access files to allow the IRS to submit the refund. When victims access these files, malware is then installed on their devices. Remember: The IRS never sends unsolicited emails and never emails taxpayers about the status of refunds. Refund information can be found at https://www.irs.gov/refunds
Clean up your browser and prevent future scams
Ghost Tax Preparers
Unethical tax return preparers, known as "ghost preparers" are a threat to U.S. taxpayers. Under U.S. law, anyone who is paid to prepare or assist in preparing federal tax returns must have a valid Preparer Tax Identification Number (PTIN). Paid preparers are required to sign the return and include their PTIN. Ghost preparers do not sign the return and instead tell the taxpayer to sign and mail it to the IRS.
These tax preparers benefit financially by promising a big refund by charging fees based on a percentage of the refund. They use dishonest tactics to erroneously qualify their clients for tax credits and deductions to boost their refunds and require payment for their service in cash only. The IRS often catches these false deductions and credits, resulting in audits that leave the taxpayer, not the ghost preparer, responsible for paying back the difference and facing potential criminal liabilities. For help choosing an ethical tax preparer, visit https://www.irs.gov/tax-professionals/choosing-a-tax-professional
How Can I Avoid Falling Victim to Tax Scams?
Only Send Tax Payments To the U.S. Treasury
The IRS will never ask you to wire money, do a bank transfer, or provide card information by phone or email. Instructions for making tax payments is found at https://www.irs.gov/payments
Be Aware of Scare Tactics
Criminals use scare tactics to trick victims into providing payment or sensitive information. The IRS will not suspend or revoke your social security card or driving privileges for delinquent tax payments.
Install Browser Protection
Browser protection scans each website you visit, and each extension you add to ensure that they're free of malicious code and scams. They catch things like phishing pages and keyloggers that often go unnoticed, even to the savviest individuals. When a malicious site or extension is found, these products block the offending website or extension and let you know why. They also alert you when a website that you're visiting is still too new to be trusted. Browser Protection keeps you safe by stopping threats BEFORE they reach your device, instead of afterward like traditional antivirus solutions.
Activate Live Account Monitoring
If you think you may have fallen victim to a tax scam involving phishing, account monitoring services can alert you if your personal information is being shared or sold to criminals on the dark web. Being alert is critical so that you know to begin taking action to protect yourself right away.
Sources Internal Revenue Service