Tax season is a busy time for scammers, hackers and other criminals. Billions of dollars are shuffling around between individuals, financial institutions and the government, and if criminals can even snag a fraction of it, they'll be rich.
That's why you can expect to encounter one or more scams in the next two months meant to steal your information or money. Criminals have a whole bunch of tricks, so even if you avoid one, you might get fooled by another if you aren't careful. That's why we're going to tell you what scams are big right now and what you need to look for.
1. Phone scams
Far and away the most popular scam of any kind is the phone scam. Many people are on guard against scams on their computer, but they tend to be more trusting of people who call. Scammers make it even more believable by spoofing caller ID to say "IRS" or to show a legitimate IRS number.
When you get the call, the "IRS agent" on the other end will claim that you have unpaid taxes. If you don't send them the money via wire transfer or prepaid debit card right away, they'll have the police arrest you.
In another variation, they might say that you have a refund you didn't know about and they need your bank account information to transfer the money. They might ask you to provide your Social Security number and other sensitive information to prove you're the right person.
The prospects of going to jail or getting more money are enough to fool every typically cautious person, especially when the IRS is involved. Fortunately, there are five ways you know that these calls are fake.
- The IRS will mail you an official bill on government stationery before it calls. If you do get a call, it shouldn't be a surprise.
- You can question or appeal the amount you owe before paying. There's no reason to rush.
- The IRS won't ask you to use a certain type of payment, such as insisting you use a wire transfer.
- The IRS won't ask for payment information over the phone or any other sensitive information.
- The IRS won't threaten to have the local police come and arrest you for not paying.
If you do get a call from the "IRS" out of the blue, it's probably a scam. If you feel pressured to take action of some kind, it's definitely a scam.
If you aren't sure, get the name of the person who called you, and the branch they're calling from. You can also ask if there's a reference number for your case. Then go look up the phone number for that IRS office and call it directly. That should set the matter straight very quickly.
Unfortunately, that's not the only way criminals come after you.
2. Phishing email and text scams
Phishing email scams are a favorite tool of hackers because they're so effective. That's why we regularly tell you how to spot and avoid them. However, when it comes to IRS phishing scams, criminals really step up their game. Take a look at this phishing email to see what we mean.
You need to be extra careful at the moment, because, according to the IRS, phishing emails have surged this tax season. And it isn't just emails; hackers have also started sending more text messages claiming to be from the IRS.
The IRS says the emails and texts that hackers are sending include several messages, including: Update your filing details; Get your IP PIN; Get your E-file PIN; Order a transcript; and others. In other words, there isn't just one red flag. The IRS also says the scams aren't limited to a specific area of the country.
Be extra careful if you receive an email or text where you're being asked to provide personal information, like your Social Security number. If hackers get their hands on this information, they may file tax returns in your name and collect a refund from the IRS.
"This dramatic jump in these scams comes at the busiest time of tax season," said IRS Commissioner John Koskinen, in a statement. "Watch out for fraudsters slipping these official-looking emails into inboxes, trying to confuse people at the very time they work on their taxes. We urge people not to click on these emails."
The IRS also notes that it "generally does not initiate contact with taxpayers by email to request personal or financial information." If you receive a phishing email that appears to be from the IRS, report it to the IRS by sending an email to Phishing@IRS.gov, or visit the IRS's Report Phishing and Online Scams page by clicking here.
3. CEO scam
We reported recently about a scammer who tried to target our studios by posing as the CEO. This same tactic could happen in your business as well, or wherever you work.
The tax season variant sees the fake CEO demanding all the employee W-2 forms be sent to them. This happened to a real company, although the employee who got the email got suspicious and didn't send them.
One thing to look for is whether or not the request is coming from the CEO's official email address. Even if it is, it never hurts to double-check over the phone or in person if the request is out of character or requests a lot of sensitive information.