With tax season well underway, taxpayers should officially be on the alert for all kinds of innovative scams.
From imposters posing as company executives to fake IRS agents, con artists are constantly developing new ways to steal your personal information – and your money. While these scams happen year round, they are particularly noticeable during tax season.
Here are seven common tax scams the IRS is warning taxpayers to watch out for this year:
1. Fake emails from the Taxpayer Advocacy Panel.
Some taxpayers are receiving bogus emails that appear to be coming from the Taxpayer Advocacy Panel regarding a tax refund. Recipients are typically asked to provide personal and financial information.
If you receive such an email, it’s best to avoid replying to it. Taxpayers can forward the email to firstname.lastname@example.org and explain that you believe it’s a scam email phishing for personal information.
The real Taxpayer Advocacy Panel serves as an advisory board to the IRS and never asks for or receives personal and financial information on taxpayers.
2. IRS impersonators on the phone.
Someone from the IRS calls and asks to verify your tax return information. The caller says they’ve received your tax return but need to clarify a few details -- like your Social Security number, bank numbers and credit card information -- in order to process it. Only they’re not with the IRS – they’re con artists trying to steal your personal information.
3. Fictitious corporate executives.
A new type of scam has emerged over the past month and has already hit a number of companies, including Weight Watchers International. Scammers impersonating high-ranking company executives are duping staffers in human resources and payroll departments into forwarding employee’s financial and personal information via email.
The IRS issued as alert about the scam last month and said that the con artists typically ask a company employee to send the W-2 forms or a list of details like social security numbers and home addresses for a number of employees. The staffer who receives the email believes it came from a superior in the company and follows through with the information.
4. “Official” websites.
Over the past year, the IRS has seen a 400 percent uptick in phishing and malware scams. These phony emails, constructed to look like they’re from the IRS or another legitimate entity, ask for information related to filing status, PINs, refunds and personal information, among other data.
When a taxpayer clicks on links in the email, they’re directed to a website that’s designed to resemble an authentic-looking site, such as IRS.gov. In addition to potentially containing malware that can harm your computer and grant scammer’s access to your files, the sites typically request Social Security numbers and other personal information. The information can then be used to help file fake tax returns.
This scam has also been seen in the form of a text message and has been reported countrywide.
5. Phony IRS phone calls.
Checking your caller ID to avoid scammers’ calls isn’t enough anymore. Crafty cons have figured out how to modify the caller ID when they’re phoning taxpayers to make it seem like the IRS is calling. These con artists use phony names and fake IRS identification badge numbers to sound more legitimate.
Victims are informed that they owe the IRS money and must pay it back immediately through a pre-loaded debit card or wire transfer. The caller threatens them with arrest, suspension of a driver’s or business license, and possibly deportation if the victim refuses to comply. The caller can be rude and aggressive. Another tactic is to inform the victim that they have a refund due in order to dupe them into disclosing private information.
6. Targeting tax professionals.
Even tax professionals aren’t immune to tax scams. Fake emails, which appear to be from the IRS e-services program, ask tax professionals to update their IRS e-services portal information and Electronic Filing Identification Numbers (EFINs). But the links provided in the email are actually a phishing scam meant to steal user names and passwords.
7. Bogus IRS website.
In another email scam that has recently surfaced, victims receive an email that appears to be from the IRS and that asks recipients to update their IRS e-files. The email includes a link to a sham website that resembles the official IRS site and once victims click on the link, they are subject to a phishing scam.
The IRS requests that any taxpayer who receives an email like this not to respond to it or click on the links and forward it to the IRS.
How to Avoid the Scams
It’s not that difficult to avoid a tax scam if you follow these tips from the IRS:
* The IRS never calls taxpayers about money owed without first mailing a bill.
* The IRS never demands that you pay taxes before giving you the chance to question or appeal the amount they say you owe.
* The IRS does not require taxes to be paid using a specific method, such as a prepaid debit card.
* The IRS never requests credit or debit card numbers over the phone.
* The IRS does not threaten to have the local police or other law-enforcement groups arrest you for not paying your taxes.
So if you see any of these red flags, be sure to stay clear.