Tax-related identity theft and IRS imposter scams are especially problematic this time of year. But you can protect yourself by learning how to identify and thwart a scammer. Here are 5 common tax-related scams and how to avoid them.
IRS Imposter Phone Scams
Watch out for criminals who make aggressive and threatening phone calls, claiming to be IRS agents. If you receive an unexpected call from the IRS, it’s likely a scam. If you had unpaid taxes or other problems, the IRS would typically first contact you by mail.
- Scammers often demand a tax bill be paid with cash, a wire transfer or a prepaid debit card or gift card – don’t do it!
- Scammers might use fake caller ID numbers, employee titles and badge numbers, and they might have your name, address and other personal information when they call.
- If this happens to you, hang up and call 800-366-4484 or visit the Treasury Inspector General for Tax Administration scam reporting webpage.
IRS “dirty dozen” list of imposter phone scams
Some scam artists set up fake charities to steal money or personal information. To avoid falling victim to this common scam, research organizations before making a donation.
- Watch out for charities with names that are similar to familiar organizations.
- Don’t give out personal financial information, such as Social Security numbers or passwords, to anyone who solicits a contribution.
- Make your donation by check or credit card to provide documentation of the gift.
Search IRS list of tax-exempt organizations
How to spot fake charity scams
Return Preparer Fraud
One of the most common tax scams during tax season is return preparer fraud. Most tax professionals provide honest, high-quality service, the IRS says, but watch out for preparers who make outlandish promises of overly large refunds, and check the preparer’s qualifications.
- Choose your tax return preparer carefully.
- Ask for references, or check the IRS’s list of credentialed and qualified tax preparers.
IRS directory of federal tax return preparers
Return preparer fraud one of the “dirty dozen” tax scams
Phishing Email Schemes
In phishing email schemes, scammers pose as a trusted person or organization in order to steal your personal information. The criminals create websites that look legitimate, but contain fake log-in pages in an attempt to capture passwords, Social Security numbers and other information they can use to steal your identity. Scam emails and websites might also infect your computer with malware, giving scammers access to your personal files and login information.
- Don’t open surprise emails or click on web links in emails claiming to be from the IRS.
- Remember, the IRS typically first contacts people by mail if there’s a problem.
Fight fraud with these tools and tips from Bell
How to avoid phishing schemes
Some criminals use a stolen Social Security number or individual taxpayer identification number to file a false tax return and claim a fraudulent refund. The IRS, state tax agencies and the tax industry have enacted a series of safeguards to crack down on the problem. But the IRS reports criminals are also coming up with more creative ways to steal information to impersonate taxpayers. Protect yourself by:
- Using security software with firewall and antivirus protections
- Encrypting sensitive files such as tax records stored on your computer
Bell’s tips on online banking security and protecting your personal information
IRS tells how you can fight tax-related identity theft