Have you ever received a call or an email from someone claiming to be from the IRS asking for your personal information? If yes, you’re not alone. In recent years, there has been an increase in income tax scams, and their tactics have become more sophisticated.
From fake emails to phone calls, these scammers are finding new ways to trick taxpayers into giving away their personal information, which they then use maliciously. According to ID Watchdog, the number of people targeted by IRS impersonators in the US has exceeded 2.4 million. As a result, the total amount of money lost by over 14,700 victims exceeds $70 million.
They have been working hard to combat these income tax scams, but the IRS (Internal Revenue Service) warns taxpayers that they remain problematic.
How Income Tax Scammers Pose As The IRS
Tax Return Mail Schemes
Lookout for a cardboard envelope from a delivery service such as FedEx or USPS. The letter enclosed includes the IRS letterhead and claims to be “in relation to your unclaimed refund.”
Although the mailing looks genuine, the contact information is fake and does not belong to the IRS.
The scheme deceives individuals into providing personal information, such as photos of their driver’s license, which identity thieves may use to steal tax refunds and other private financial information.
“IRS” Home Visits
Individuals attempting to defraud may show up unannounced, claiming to be agents of the Internal Revenue Service. This confuses not only taxpayers but also local law enforcement officials.
According to a recent announcement by the agency, the IRS will stop surprising taxpayers with visits. Instead of these visits, the revenue officers will send an appointment letter (725-B) to contact the taxpayers. This also allows time for taxpayers to prepare before their follow-up meeting.
Phishing and Smishing Tax Scams
Taxpayers should also be on the lookout for identity thieves sending Phishing emails and Smishing text messages. These messages promise tax refunds or offers to help “fix” tax problems.
These phony tax professionals may convince taxpayers to click on fraudulent links, allowing these scammers to steal critical personal information.
Phone IRS Schemes
Scammers often use fake IRS identification and caller ID to scam people over the phone. Their ultimate goal is to steal personal information or money from their victims.
The scammers often have access to the personal information of their targets and threaten victims with arrest, deportation, or license suspension if they don’t pay immediately via wire transfer or gift card. Additionally, victims are sometimes drawn into revealing personal information by being promised a refund.
In cases where the scammers are unable to reach a victim, they may leave an “urgent” message requesting a callback.
Accessibility & Scams
There have been reports of fraudulent schemes targeting individuals with hearing impairments through video relay services. It is important to note that although these services have interpreters, they lack any mechanism to verify the authenticity of incoming calls. This leaves the vulnerable population open to exploitation by scammers who can go undetected.
Victims with limited English proficiency are also particularly vulnerable as they may be approached in their native language and threatened with deportation, arrest, or license revocation. The IRS has released a video detailing tax scams that use video relay services for more information.
According to the IRS, they will never:
- Call to request immediate payment through a prepaid debit card, gift card, or bank transfer.
- Threaten to bring in law-enforcement groups to have you arrested for not paying.
- Demand payment without providing an opportunity for questioning or appealing the amount.
- Request credit or debit card numbers over the phone.
If taxpayers receive any request from the IRS, either through mail or phone, they can always reach out to the IRS customer service to verify its authenticity.
To learn more about past and current IRS scams, visit the IRS website by clicking here.
Protecting Against Income Tax Scams
Here are some ways to protect yourself against IRS income tax scams:
- Exercise caution when dealing with emails or phone calls you did not request, especially those claiming to be from the IRS.
- Be aware that the IRS will never reach out to taxpayers through email, text messages, or social media channels.
- Avoid sharing your personal or financial details with individuals claiming to represent the IRS. The IRS will never urge you to make payments through wire transfers or prepaid debit cards.
- Watch out for urgent emails, for example, “update your account now!” They might ask you to click on a link or open an attachment.
- Avoid downloading software or apps from pop-up ads.
- Share the importance of security across computers and mobile devices to your employees (and loved ones).
- When filing your taxes, use a preparer that you can trust. Before submitting your tax return, carefully review it to avoid any errors. Only provide your tax information to preparers registered with the IRS, have a Preparer Tax Identification Number (PTIN), and furnish you with a copy of your return.
IRS Cybersecurity Tips
Just like AtNetPlus, the IRS recommends taking cybersecurity measures to protect against all possible threats:
- Use a firewall and security software on your computer. Set it to automatically update to ensure you have the latest protection against potential threats.
- Use strong and unique passwords to protect your personal information. Consider using a password manager to help you securely generate and store complex passwords.
- Implement Multifactor Authentication.
- When you share personal information online, only do so on encrypted websites. Always look for “https:” in the website address bar to ensure your data is transmitted securely.
- Regularly back up your data to ensure you don’t lose any vital information.
Reporting Income Tax Scams
The IRS has provided multiple avenues for reporting different scams on their website. If you come across any abusive tax scams or red flags, it’s crucial to report them immediately.
Reporting Phishing IRS Scams
If you receive an unsolicited email claiming to be from the IRS or related to an IRS function, report it to email@example.com.
Reporting Calls & IRS Impersonation Schemes
To report calls or other IRS impersonation schemes, contact the Treasury Inspector General for Tax Administration at 800-366-4484 or file a report online.
- ID Watchdog – Beware of IRS Phishing and Impersonation Scams—During Tax Season and Year-Round
- IRS – Knowing how scammers pose as the IRS can help taxpayers protect themselves
- IRS – Tax scams – how to report them
- IRS – Tax scams/Consumer alerts
- IRS- IRS wraps up 2023 IRS Dirty Dozen list; reminds taxpayers and tax pros to be wary of scams and schemes, even after tax season