How to Spot and Avoid Income Tax Scams

Filing your taxes can be stressful on its own, but today it’s more important than ever to be aware of criminals who prey on unsuspecting taxpayers. Below are some of the most common tax scams, and ways to protect yourself to ensure you don’t become a victim:

Phishing/Smishing

Phishing/Smishing is a scam using unsolicited email (phishing) or text (smishing) to direct you to a fake website (posing as a legitimate website), to trick you into providing personal and financial information. The email/text or fake website can also be used to infect your device with malware.

• FACT: The IRS will NOT initiate contact with taxpayers by email or text to request personal or financial information. Don’t click on anything claiming to be from the IRS that takes you by surprise. If it is an email, verify the URL of the website in the email; official IRS websites have URL addresses beginning with www.irs.gov. Do not click on any links in a text. Do not enter information if you are not on the official IRS website, no matter how official it looks. If you receive an unsolicited email that appears to be from the IRS, report it by sending it to phishing@irs.gov.

IRS Impersonation Telephone Scam

Scammers call pretending to be IRS agents to convince you to pay an outstanding tax debt that doesn’t exist. They can sound very convincing, and may use fake names and IRS identification badge numbers to sound official. They may even threaten you with jail time or garnishment if you do not immediately settle the debt. The callers typically alter the caller ID to make it look like the IRS is calling and leave urgent callback requests if the phone is not answered.

• FACT: The IRS will NEVER call taxpayers demanding payment on the spot, nor will they call about taxes owed without first having mailed you a bill. The IRS will not demand payment without giving you the opportunity to question, or appeal the amount you owe. They will not require you to use a specific payment method for your taxes, such as a prepaid debit card, or store gift cards, and will never threaten to bring in law enforcement to have you arrested for not paying. If you receive a call like this, hang up immediately and contact the Treasury Inspector General for Tax Administration at 1-800-366-4484 to report the call.

Return Preparer Fraud

The majority of tax return professionals provide honest, high-quality service, but there are some dishonest preparers out there who prepare tax returns with the intent of committing refund fraud or identity theft. Once they have your personal information, they may falsify your tax return to obtain a huge refund, or use the information on your tax return to steal your identity.

• HELPFUL TIP: You should be suspicious of anyone who promises a large refund without looking at your records, someone who asks you to sign a blank return, or charges fees based on the amount of the refund. Before choosing a tax preparer, you should ask for their IRS Preparer Tax Identification Number, or PTIN, and verify it with the Directory of Federal Tax Return Preparers at www.irs.gov.

Summary

• The IRS will NOT:
• Contact you or take payment on social media.
• Accept gift cards or prepaid debit cards as payment
• Threaten to call law enforcement or immigration officials
• Take your citizenship status, driver's license or business license
• Leave pre-recorded voicemails (robocalls)
• Mail tax debt resolution advertisements
• View more information on the IRS website.
• Never respond to unexpected emails or other communications that are supposedly from the IRS.
• Never provide personal information to someone who calls you out of the blue, even if they claim to be from the IRS.
  • You should only provide personal information to the IRS when YOU are the one who initiates the call.
  • You should only provide personal information to a licensed tax professional after you have verified them with the IRS.
• To help combat taxpayer ID theft, the Internal Revenue Service encourages all taxpayers to sign up for an identity protection personal identification number (IP PIN), which provides an added layer of security to help protect against tax-related identity theft.

By following these tips, you can help protect yourself from scammers. Although no form of protection is absolute, a combination of personal awareness and protective tools will make you as safe as possible. Thank you for being a Third Federal customer. 

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