We’re only a couple of weeks away from the official start of the dreaded tax season. The IRS has announced the tax-filing season will begin Monday, Jan. 27, 2020.
And you know what that means. Yep, scammers will be out in full force. Though tax scams can appear all year long, you’re more likely to spot them during filing season. Tap or click here to learn about the last batch of tax scams.
That’s why it’s important to know how to spot the red flags before it’s too late. We’ll tell you about the signs of a scam, and how to seek help if you’ve fallen for one. Let’s start with the most popular scams.
Old dog, new tricks
While most cybercriminals are constantly updating their techniques and equipment to be more sophisticated, a lot of the scams they try to pull off are just different versions of ones that have worked in the past.
Those include tax scams that could put not only your finances in jeopardy, but also your identity. Think about how much personal information criminals can harvest from tax documents. Your name, birthdate and Social Security number would all be exposed if your tax information fell into the wrong hands.
That’s why tax documents are goldmines for crooks and you need to be extremely careful when dealing with them. The IRS wants everyone to be on high-alert this season and be aware of the following potential scams.
Phishing tax scams are very popular with cybercriminals. This is when someone poses as a legitimate organization such as a bank, credit card company, tax software provider or even the IRS.
They try tricking their victims into giving up sensitive data such as passwords, Social Security numbers, bank accounts or credit and debit card numbers. These attacks can be carried out through email or even phone calls.
You also need to watch for emails that request direct deposit changes for refunds or account updates. And watch for scam emails claiming to be from your tax software provider or others asking you to update online accounts.
The IRS said if you receive an email claiming to be from them that contains a request for personal information, taxes associated with a large investment, inheritance or lottery DO NOT REPLY!
Also, don’t open any attachments or click on any links. They could contain malicious code that may infect your device. If you think you’ve received a tax-related phishing email, report it to the IRS. Forward the email to firstname.lastname@example.org, then delete the original email.
Overdue tax scam
The IRS recently said a twist on an old scam related to Social Security numbers is making the rounds. Scammers claim to be able to suspend or cancel the victim’s SSN.
They might even mention overdue taxes in addition to threatening to cancel your SSN. If you receive a call threatening to suspend your SSN for an unpaid tax bill, immediately hang up. It’s definitely a scam.
Fake tax agency
This scheme involves the mailing of a letter threatening an IRS lien or levy. The lien is based on bogus delinquent taxes owed to a non-existent agency. If you receive a message from the “Bureau of Tax Enforcement,” know there is no such agency.
The lien notification scam also likely references the IRS to confuse potential victims into thinking the letter is from a legitimate organization. Don’t fall for it.
Here is something to keep in mind: the IRS does not leave pre-recorded, urgent or threatening messages. In many variations of the latest phone scam, victims are told if they do not call back, a warrant will be issued for their arrest. Other verbal threats could include law-enforcement agency intervention, deportation or revocation of licenses.
Criminals can “spoof” caller ID numbers to appear to be anywhere in the country — including an IRS office. This prevents taxpayers from being able to verify the true call number. Crooks can also spoof local sheriff’s offices, state departments of motor vehicles, federal agencies and more to convince victims the call is legit.
You should never give out sensitive information over the phone unless you’re positive you know the caller is legitimate. When in doubt, hang up.
How to spot a tax scam
The IRS said the following are telltale signs of tax scams. Things to remember are the IRS will never:
- Call to demand immediate payment using a specific payment method such as a prepaid debit card, iTunes gift card or wire transfer. The IRS does not use these methods for tax payments.
- Ask a taxpayer to make a payment to a person or organization other than the U.S. Treasury.
- Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
- Demand taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
If you receive a call that’s allegedly from the IRS and you don’t owe taxes and have no reason to think you do, follow these steps:
- Report the call to the Treasury Inspector General for Tax Administration. Tap or click here to file the report.
- Report the caller ID and callback number to the IRS by sending it to email@example.com. Write “IRS Phone Scam” in the subject line.
- Report the call to the Federal Trade Commission. When reporting it, you should add “IRS Phone Scam” in the notes. Tap or click here to report the call.
If you owe taxes, or think you might, and receive a call that’s allegedly from the IRS, follow these steps:
- View tax account information online at IRS.gov to see the actual amount owed and review your payment options.
- Call the number on the billing notice.
- Call the IRS at 800-829-1040.
Those are just a few of the tax-related scams you might see during this filing season. There will be others. Sign up for our Alert newsletter and we’ll keep you informed whenever new scams start to spread.