Tax season officially opens Tuesday, meaning that the Internal Revenue Service is now accepting 2014 returns — and that taxpayers should officially go on alert for scams that could cost them dearly.
From identity thieves to imposters posing as the IRS on the phone, con artists have become masters at obtaining sensitive personal information from taxpayers to make a quick buck. Many of these scams happen all year long, but are especially common during tax season.
Related: How Obamacare Will Impact Your 2014 Taxes
Below are three common tax scams to watch out for this year. You can find other tax scams that were popular during last year’s tax season on the IRS website.
Tax Identity Theft
Scammers have bilked the IRS out of billions by stealing Social Security numbers and using them to obtain fraudulent tax refunds. Most victims don’t find out until after they’ve filed their real tax return.
You can prevent yourself from becoming a victim of tax ID theft by protecting your Social Security number — don’t carry around your Social Security card, for example, and be careful when giving out the number. Also, check your credit report annually to make sure your Social Security number isn’t attached to unfamiliar credit accounts.
If you’ve already become the victim of an ID theft scam, you should file a police report and a complaint with the Federal Trade Commission. You should also contact one of the three major credit bureaus to place a fraud alert on your credit record.
IRS Imposters
Someone from the IRS calls you and tells you that you owe Uncle Sam money and need to pay immediately through a wire transfer or a prepaid debit card. They may ask for your credit card information. Only they’re not with the IRS.
Some con artists may also call you and say you’re owed a refund to try to trick you into sharing private information. If you refuse to share information, they may threaten to report you to the police or to revoke your driver’s license.
“They might know all or part of your Social Security number, and can fake caller ID information to make it look like it really is the IRS calling,” the FTC warned in a release last week.
Related: 3 Reasons to Get a Head Start on Your Taxes
Email Phishing Scams
Every year con artists come up with new email phishing scams during tax season. Often, the bogus emails appear to be coming from the IRS Taxpayer Advocate Service and to include a fake case number. Recipients are typically asked to click on a link to resolve some kind of mistake, such as a document processing error.
The links may take taxpayers to a web page asking for personal information. If you receive such an email, it’s best to refrain from replying to it and from clicking on any link in the email. Taxpayers can forward the email to phishing@irs.gov.
Even if you aren't the victim of a tax scam, you may still be impacted. Some states including Ohio and Illinois have already warned taxpayers that their tax refunds may be delayed due to their revenue department implementing new security measures to catch fraudulent returns.
The Good News
It’s actually not that difficult to spot a tax scam, as long as you keep in mind that:
- The IRS never calls taxpayers about money owed without first mailing a bill.
- The IRS always gives taxpayers the opportunity to question or appeal the amount supposedly owed.
- The IRS never requires that taxpayers use a specific payment method for taxes.
- The IRS never asks for credit or debt card numbers over the phone.
- The IRS never threatens to bring in local police or other law enforcement group for not paying.
Related: Get Ready for the Most Miserable Tax Filing Season Ever
As part of Tax Identity Theft Awareness Week, the FTC, along with the AARP and the Treasury Inspector General for Tax Administration are also hosting a webinar on Jan. 27 at 2 p.m. EST to explain common tax scams and teach taxpayers how to protect themselves.
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