In an ordinary year, your taxes would be filed for the year at this point in time. But we’re living in 2020, and thanks to the COVID-19 pandemic, the IRS extended the filing deadline to July 15 – which is only a couple of short days away.
As a result, the IRS is reminding taxpayers to keep their wits about them. Scams are on the rise, and taxpayers, in particular, are top targets for financial crimes. Tap or click here to see some of the tricks these scammers are pulling.
If you know what scams to watch out for, you’ll be much safer when filing your taxes and collecting your hard-earned refund. Here are the biggest scams to keep an eye out for, as well as what you can do to stay safe.
The IRS is warning taxpayers about a wave of scams on the rise
In the latest Daily Tech Update, Kim talks about a new breed of tax-season scam that masquerades as an email from any one of the nation’s largest tax prep companies. Listen and find out about the full range of threats, as well as what you can do to stay safe.
With scams on the rise and the tax filing deadline quickly approaching, the IRS has issued a formal warning regarding dangerous campaigns circulating online.
In a new bulletin posted to the agency’s official website, the IRS warns that scammers are “hard at work looking for ways to steal your personal information and your money.” This is no exaggeration, as cybersecurity researchers have noted a significant spike in cybercrime over the course of the COVID-19 pandemic.
The targeting of taxpayers with fraudulent IRS notices and communications is only the latest attempt to steal money and data from people during a period of economic hardship. Tap or click here to see an IRS scam that was so convincing the agency had to make a statement debunking it.
The scammers in question are mostly relying on their classic tricks to deceive people, but a dangerous new variety of tax scam has already managed to claim some victims in recent weeks.
To help you stay safe, we’ve collected some of the most common scams you’re likely to encounter as the deadline approaches. These efforts may seem like overkill, but don’t forget: If the scammers succeed in tricking at least one person, the operation was a success. It’s up to us to not become that person.
Tax prep scam emails
This is one of the newest tricks in the scammers arsenal, and one that not many taxpayers are expecting.
Typically, a victim will receive an email from a scammer claiming to be from one of the big-name tax preparation agencies in the U.S. (including Turbotax, H&R Block, Tax Act and others). The email includes an extremely realistic layout and logo, and will usually feature some kind of attachment you’re instructed to download.
And that, right there, is how they get you. If you make the mistake of downloading the attachment, an application called TeamViewer will be installed instead. This application is designed for remote working, but in the wrong hands, it allows a hacker to control your computer and access your data.
Security researchers at Proof Point found that the Team Viewer scam can also take the form of malicious Microsoft Word documents with instructions on “enabling editing.” These documents are often described by the scam emails as legitimate tax forms, which is why people are making the mistake of downloading them.
To protect yourself, don’t bother downloading any attachments whatsoever unless you know who is sending it. Better yet, any attachment you receive by email should be something you’re anticipating (for example, someone telling you in advance that they’re mailing you an attachment).
Phishing tax scams are some of the most popular with cybercriminals. This is when scammers pose as legitimate organizations such as a bank, credit card company, tax software provider, or even the IRS.
These scams trick victims into giving up sensitive data like passwords, Social Security numbers, bank accounts or credit and debit card numbers. These attacks can also be carried out through email or even phone calls.
Keep an eye out for emails that request direct deposit information for depositing refunds (a common tactic) or account updates (like a password reset). Especially watch out for 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! The IRS will never directly communicate with you by any other channel other than traditional mail.
If you think you’ve received a tax-related phishing email, report it to the IRS. Forward the email to [email protected], then delete the original email. This will help them track the scammers and potentially warn others of what to avoid.
Overdue taxes and fraudulent returns
The IRS recently described a twist on an old scam related to Social Security numbers is making the rounds. In this case, scammers claim to be able to suspend or cancel the victim’s SSN. To scare you, more dedicated scammers will sometimes demonstrate they have access to your SSN as well.
If any scammer has this information already, they most likely obtained it from another data leak. But even if the data is incomplete or partial (such as the last four digits, for example), they can still use words and graphics to make their threats seem credible.
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.
If they have complete data, however, they may go as far as filing a fraudulent report in your name. Some who have fallen victim to this scam received a large refund from the IRS, and the scammers themselves demanded a cut of it!
If this happens to you, don’t hesitate and contact the proper authorities. First, file a complaint with the FTC and request that the major credit bureaus put a “fraud alert” on your record. You may also want to ask them to freeze your credit to make sure there are no unauthorized accounts opened in your name. Tap or click here to see the benefits of freezing your credit.
For good measure, you may also want to contact IRS at 1-800-908-4490.
Fake tax agency
This scam involves a phony letter threatening a tax lien or levy from the IRS. The lien is based on supposed “delinquent taxes” owed to a non-existent agency – the “Bureau of Tax Enforcement.” No such agency exists, mind you.
This scam pretends to be in league with the IRS to confuse potential victims into thinking the letter is legitimate. Don’t fall for it. Instead, throw the letter out and carry on with your tax preparation.
Don’t forget: the IRS never leaves pre-recorded, urgent or threatening messages by phone or text. In many phone scam variations, 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 suspension of licenses.
Criminals will “spoof” caller ID numbers to appear to be anywhere in the country — including an IRS office. This prevents taxpayers from being able to check the caller’s real number. Crooks can also spoof local sheriff’s offices, state departments of motor vehicles, federal agencies and others to convince victims the call is legit.
Some don’t even bother with phone calls and prefer to bombard you with text messages. Thankfully, these can be blocked and ignored without too much hassle. The IRS, to its credit, will never contact you this way.
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 describes the following telltale signs that signal a tax scam. It’s important to remember 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 protected] 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 this week, but be warned: There will be others. But if you know what to look for, these scammers can’t hurt you.