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Tax Time is Prime Time for Scammers: How to Stay Safe When Paying Your Taxes to the IRS

Who else loves tax season besides accountants? Scammers. 

It’s high time of year for online risks here in the U.S. with the onset of tax season, where scammers unleash all manner of scams aimed at taxpayers. The complexity, and even uncertainty, of filing a proper tax return can stir up anxieties like, Have I filed correctly, Did I claim the right deductions, Will I get audited, and Will I get stung with a tax penalty are just a few—and these are the very same anxieties that criminals use as the cornerstone of their attacks.   

Yet like so many scams, tax scams give off telltale signs that they’re indeed not on the up-and-up. You have ways you can spot one before you get caught up in one. 

Scammers prey on the uncertainty of tax season 

In all, we’ve learned to watch our step with the Internal Revenue Service (IRS), so much so that receiving a notification from the IRS can feel like an unwanted surprise. Uh oh, did I do something wrong? However, in reality, less than 1% of returns get audited and most discrepancies or adjustments can get handled easily if addressed promptly. 

Still, that wariness of the IRS makes for ripe pickings when it comes to hackers, who prey on people’s fear of audits and penalties. Common scams include email phishing attacks, phone calls from crooks posing as IRS agents, texts claiming there’s a problem with our tax software, and even robocalls that threaten jail time for unpaid back taxes. What’s more, fraudsters can take things a step further by committing identity theft and then filing tax claims in other people’s names. 

With that, let’s dig into a list of the top scams wind up on our screens and phones during tax time.  

Tax scams to look out for 

This IRS Dirty Dozen: Top tax-season scams 

Straight from the authority itself, the IRS publishes its Dirty Dozen, an annual list of the top tax season scams. Year-over-year, many of the same scams make the list, yet new ones continue to crop up as scammers try to take advantage of current events. A couple recent examples include email phishing scams centered around Employee Retention Credits, pandemic relief checks, and federal stimulus checks. Additionally, the IRS has warned filers about disinformation that circulates on social media, such as bogus advice that urges filers to alter their W-2 figures for a better refund. With new scams entering the mix every tax season, the Dirty Dozen offers plenty of good advice that can help you steer clear of scams.  

Robocalls and other phone scams 

We all know the annoyance of spammy phone calls, whether they’re for phony car warranties, tech support services, or debt collection agencies. During this time of year, you can add phony IRS agents and financial service providers to the list.  

The stories that scammers will tell will vary, but they often share common themes: 

  • The IRS wants to provide you with a refund, yet they need your personal and financial account information before they will pay you. 
  • You owe back taxes! Pay the IRS now with a money order or gift cards, otherwise you’re subject to immediate arrest! 
  • A financial services company offers to file your taxes on your behalf, all you need to do is provide them with your tax ID or Social Security number—along with other personal and financial information. 

Another thing they have in common: they each outright ask for money, personal information, and sometimes a combination of both. All of which is an indication of a scam.  

For the record, per the IRS, it does not: 

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer.  
  • Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. You should also be advised of your rights as a taxpayer. 
  • Threaten to bring in local police, immigration officers, or other law enforcement to have you arrested for not paying.  

Also per the IRS, they cannot revoke your driver’s license, business licenses, or immigration status. As noted above, scammers will often weave these threats into their stories. Those threats are entirely empty. 

What will the IRS do? Generally, the IRS will first mail a notice to any taxpayer who owes taxes. In some instances, IRS collection employees may make an unannounced visit to your home and properly identify themselves with IRS-issued credentials and a federal ID card. In all cases, the revenue officer will only request required payments by cash, check, certified funds, or money order payable to “United States Treasury.” 

As for scam calls that pose as financial services companies or tax preparers, ignore them. If you’re planning to work with a tax pro, do your research and work with a legitimate, accredited individual or organization. The IRS has a great resource that can get you started on your search with its “Directory of Federal Tax Return Preparers.” There you can get a list of qualified tax preparers that are verified by the IRS, which you can narrow down based on their accreditations and distance from your zip code.  

Messages by text or social media 

One way you can be sure that someone other than the IRS has reached you is if they contact you by text, messaging app, or social media. The IRS will not contact you in any of these ways. Ignore any such messages, and if your app or platform allows you to report messages or accounts as spam, do so. You can often do it with a simple click or tap. 

Another increasingly popular scam on phones is the bogus account alert. The scammer may send a message that says Your account is on hold, or something like We’ve detected unusual activity. During most of the year, scammers will use these messages to pose as online payment platforms, banks, credit card companies, online stores, and streaming services.  

Now during tax season, they’ll masquerade as IRS agents or popular tax software companies. Even though the names change, the game remains the same. The text or message will serve up a link so you can “correct the situation,” one that leads to a site that could steal your personal information or otherwise trick you into installing malware on your phone. 

As always, don’t click these links. Report them if you can. 

Phishing emails 

Phishing emails pull many of the same tricks that calls, texts, and direct messages do—you’ll simply find them in your inbox instead. The same rules for avoiding other IRS scams apply here. First, note that the IRS will never initiate contact with you via email. Nor will they send you emails about your tax refund or any other sensitive information. 

In the past, the IRS has reported that phishing emails often send their victims to lookalike IRS sites that can appear quite convincing. There, victims either receive a prompt to enter their personal and financial information or to download a file that’s laden with malware. Other emails may include attachments, which may be loaded with malware as well. 

Delete any such emails you receive. And if you have any concerns, contact your tax professional or the IRS directly. Also, the IRS asks people who receive scam emails to notify them at phishing@irs.gov. This helps the IRS track and prosecute scammers. 

Identity theft and stolen refunds 

Imagine filing your return only to find out it’s already been filed.  

A far more serious form of tax-related crime is identity theft, where a scammer uses the victim’s personal information and Social Security number to file a return in the victim’s name—and claim the refund. One particularly painful aspect of identity theft and taxes is that victims often find out only after it occurs or when it’s well underway. For example: 

  • You can’t file a return because a duplicate Social Security number has already filed one. 
  • You receive correspondence from the IRS asking a question about a return that you did not file, that you owe additional tax, have had a refund offset, or that you have collections actions against you for a return you did not file. 
  • You get a notice that an IRS online account has been created in your name, or that your existing account has been accessed or disabled by someone other than you. 

Other signs are related to employment, such as getting assigned an Employer Identification Number even though you didn’t request one, discovering that the IRS shows you received income from an employer you didn’t work for, or finding out that someone has claimed unemployment benefits in your name. Once again, both are signs of full-on identity theft where someone has assumed your identity. 

The IRS states that you should always respond to any IRS notice, particularly if you believe it is in error. If you’ve already contacted the IRS about an identity theft issue, you can reach them at 800-908-4490 for further assistance. 

Understand that if this form of identity theft occurs to you, it’s highly likely that the scammer has your Social Security number. Report that right away at https://www.ssa.gov/number-card/report-stolen-number if you think your number is being used by someone else.  

Your Social Security number ranks at the very top of your most valuable personal information. It unlocks everything from driver’s licenses, photo identification, employment, insurance claims, and of course taxes. Act immediately if you think it’s been compromised.  

Six ways you can protect yourself from tax fraud 

1) File your tax return ASAP. 

One way to protect yourself from an identity thief from claiming a return in your name is to file yours before they do. As mentioned, many victims of identity theft find out they’ve been scammed when they receive an IRS notification that their tax claim has already been filed. Simply put, file early. 

2) Get an IRS PIN. 

Another way you can help prevent someone from filing a return in your name is to request a six-digit Identity Protection PIN (IP PIN). Once you receive an IP PIN, the IRS will use it to verify your identity when you file by paper or electronically. It’s good for one calendar year, and you can generate a new one each year for your account. You can request an IP PIN at: https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin 

Also, be aware that scammers want your IP PIN as well. Phone calls, emails, or texts asking for it are scams. Outside of including it when filing your return, the IRS will never ask for it. If you are working with a tax professional, only provide it when it comes time to file. 

3) Monitor your credit and identity. 

Keeping tabs on your credit report and knowing if your personal information has been compromised in some way can help prevent tax fraud. Together, they can let you know if someone has stolen your identity or if you have personal info on the dark web that could lead to identity theft. 

Our credit monitoring service can keep an eye on changes to your credit score, report, and accounts with timely notifications and guidance so you can take action to tackle identity theft. 

Our identity monitoring service checks the dark web for your personal info, including email, government IDs, credit card and bank account info, and more—then provides alerts if your data is found on the dark web, an average of 10 months ahead of similar services.​ 

4) Get identity theft protection. 

If you fall victim to identity theft, having identity theft protection in place can provide significant relief, both financially and in terms of recovery. Our identity theft coverage & restoration support includes $1 million in funds if it’s determined that you’re a victim, which covers lawyer’s fees, travel expenses, and stolen funds reimbursement—while licensed recovery experts can help you repair your credit and identity. Considering the potential costs in both time and money, identity theft protection can speed and ease recovery. 

5) Remove your personal information from sketchy data broker sites. 

How’d that scammer get your phone number or email address anyway? Chances are, they pulled that information off a data broker site. Data brokers buy, collect, and sell detailed personal information, which they compile from several public and private sources, such as local, state, and federal records, plus third parties like supermarket shopper’s cards and mobile apps that share and sell user data. Moreover, they’ll sell it to anyone who pays for it, including people who’ll use that information for scams. 

You can help reduce those scam texts and calls by removing your information from those sites. Our Personal Data Cleanup scans some of the riskiest data broker sites and shows you which ones are selling your personal info. We also provide guidance on how you can remove your data from those sites and, with select plans, even manage the removal for you—while continuing to scan those sites in case your information reappears. 

6) Further protect yourself from online scams with online protection software. 

Comprehensive online protection software can help you on a number of counts. It warns you of suspicious links in emails and texts that could send you to malicious sites. It can further protect you from ransomware attacks, which the IRS has also listed among its Dirty Dozen. And you can use it to monitor all your transactions across all your financial accounts in one place, which can spot any questionable activity. In all, tax time or otherwise, online protection software is always a strong security move. 

Stay Updated  

A little stress and uncertainty can enter the picture during tax season, and scammers know it. In fact, they prey upon it. They concoct their scams around those feelings, hoping that you’ll take the bait and act quickly without taking the time to scrutinize what they’re saying and what they’re really asking you to do.  

Keeping up to date on what the latest scams are, having a good sense of which ones get recycled every year, and putting protections in place can help you avoid getting stung by a scam at tax season.  

For yet more information, visit the IRS Tax Scam and Consumer Alert site at: https://www.irs.gov/newsroom/tax-scams-consumer-alerts  

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