Tax returns and stress seem to go hand in hand, and adding to that stress are crooks looking to cash in on unsuspecting taxpayers. As people gear up to get their returns completed, the last thing they need is to fall prey to these fraudsters. During this time of year, it’s very common for criminals to utilize online and telephone phishing scams in order to obtain your personal information. Both of these activities rank among the top tax scams compiled each year by the Internal Revenue Service (IRS).
One of the recent online tax scams making the rounds has come in the form of an email that appears to be from the IRS, asking taxpayers to immediately update their IRS e-filing information. Other iterations of this scam include emails where the criminals pose as a bank, credit card company, tax software provider, or government agency. These emails typically include a link to a bogus website that appears legitimate, but contains phony log-in pages that are used to capture the victim’s personal information such as passwords, account numbers, Social Security numbers, etc.
You should be aware that the IRS generally does not initiate contact with taxpayers via email (or other modes of electronic communication like text messaging or social media) to obtain personal or financial information, or demand payment.
If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), you should refrain from following links in the email or responding to it with any of your personal information. The IRS encourages taxpayers to report these types of suspicious emails by sending them to email@example.com.
The IRS also warns about a spike in the number of phone tax scams in which victims are threatened with things such as police arrest, deportation, court action, and revocation of their driver’s license if they don’t pay the caller immediately. Typically, the imposters make unsolicited calls claiming to be IRS officials. They tell the victims that they must immediately pay a bogus tax bill or face retaliatory action, and they con them into sending cash, usually through a prepaid debit card or wire transfer. In the event that the taxpayer doesn’t answer the phone, the criminals will typically leave urgent-sounding callback requests.
And don’t let your caller-ID serve as barometer for whether the call is legitimate. According to the IRS, scammers will often alter caller ID numbers to make it look like the IRS is actually calling. It’s also common for the callers to use IRS titles and fake badge numbers to sound legitimate, and they may also use your name, address and other personal information to make the discussion more believable.
According to a recent announcement from the Treasury Inspector General for Tax Administration (TIGTA), roughly 896,000 of these tax scam calls have been reported since October 2013 and more than 5,000 victims have collectively paid more than $26.5 million as a result of them.
It’s important to keep in mind that when you have a tax problem, the IRS will first contact you by mail through the U.S. Post Office, rather than by phone. Furthermore, the IRS will not do the following:
- Ask for your credit or debit card numbers over the phone.
- Threaten to have you arrested for not paying.
- Demand immediate payment from you. The IRS will never call about taxes owed without first having mailed you a bill.
- Require that you use a specific payment method to pay your taxes, such as a prepaid debit card or a wire transfer.
- Demand that you pay taxes without giving you an opportunity to question or appeal the amount they claim you owe.
If you do get a phone call demanding payment from someone claiming to be from the IRS, be sure to follow these recommendations:
- If you have no reason to think that you owe taxes, do not give out any information to the caller and hang up immediately.
- Report the call to TIGTA by dialing 800-366-4484, or by filling out their “IRS Impersonation Scam Reporting” form at https://www.treasury.gov/tigta/contact_report_scam.shtml.
- Report the call to the Federal Trade Commission using the “FTC Complaint Assistant” on FTC.gov (add “IRS Telephone Scam” in the notes).
As you keep these types of online and phone tax scams on your radar this tax season, you should also keep in mind that direct deposit is a simple, fast, and secure way to receive your tax refund. Both the IRS and U.S. Treasury encourage taxpayers to use this method instead of having paper refund checks mailed to them, as direct deposit helps eliminate the possibility of a lost, stolen, or undeliverable refund check.