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Five Ways to Protect Yourself from Tax Scams

Scammers and fraudsters impersonate the IRS year-round — not just during what most people think of as “tax season.” Their objective is to trick you into giving them your money or personal information. During tax season*, they get more active, presumably hoping that your stress about filing taxes might make you more vulnerable to their schemes. Arm yourself against tax scams with these five tips.

1. Learn about common types of scams so that you can recognize a scam when you see it. The IRS compiles information on each year’s top scams in a “Dirty Dozen” list and also provides a web portal on tax scams and other consumer alerts.

  • Phishing for your personal identity — whether they contact you by email, text, social media, or phone, these scammers are trying to trick you into giving them your personal information, like your social security number or your account numbers, passwords, or PINs for your bank account or your IRS e-filing account. Some scams ask for other personal information such as details about life insurance policies.
  • Filing fake forms with your identity — Crooks may use your personal identity to file a fake tax return to trick the IRS into giving them money in the form of a tax refund or unemployment benefits.
  • Targeting your computer — A scammer may send an email with a link for you to click or a file to open. Either could contain malware that infects your computer to steal your passwords and other personal information.
  • Tricking you with fake tax support — Beware of ‘ghost’ tax return “professionals” that do not sign the tax return they prepare for you. They may ask you to pay them in cash, not provide a receipt for that payment, or improperly adjust your return to create a large refund that is directed into their own bank account. Other fraudsters impersonate the IRS Taxpayer Advocate Service in order to get their personal information. Still others try to charge you big fees pretending they will help you settle your tax debt through the offer in compromise approach the IRS offers. And some scammers impersonate the IRS and tell you they’ve recalculated your tax refund and that you must give them information to claim the money.
  • Preying on the vulnerable — Even though the federal government has not authorized new Economic Impact Payments for 2022, fraudsters are still trying to get you to fall for stimulus check scams. Scammers also target seniors, refugees and immigrants, and other vulnerable populations, often using scare tactics like threatening to arrest you, warning that your social security number will be cancelled, or impersonating the FBI, the IRS, or some made-up but impressive sounding government agency.

2. Know how the IRS works. You can hang up on scammers and delete phony emails and texts with confidence, because that is not the way the IRS would contact you if there were a legitimate tax concern. They reach out by mail first. They do not require immediate payment, and the IRS does not ask for credit or debit card numbers, gift cards, or wire transfers. If you owe money to the IRS, you will be mailed a bill and you will have the opportunity to work with the IRS on your situation. And the IRS will not threaten to arrest you. The IRS provides a helpful explanation on their website on how to know whether a phone call, email, or letter is legitimate.

3. Protect your identity and information. Follow good practice of using unique usernames and passwords for all of your online accounts and change them if you have been notified that an organization’s system has been compromised. Do not give out personal identity information to people whose legitimacy you haven’t verified.

4. Know that businesses and organizations are targeted, too. We all have to be vigilant, but those who work in human resources, education, and tax preparation should familiarize themselves with the most common ways tax scammers target them.

5. Report scams to the IRS. Protect yourself and others by reporting any tax scam you encounter as soon as possible. The IRS details how to report different types of issues on their Tax Scams – How to Report Them website.

With a little knowledge and good personal identity habits, you can spot tax scams and protect yourself against falling prey to tax scammers.