Last year the IRS stopped nearly a million fraudulent tax refunds from being paid out. After the headline-making data breaches recently the likelihood is that this number will be even greater for the 2017 tax season. Tax fraud is a multi-billion dollar industry in the US and becomes larger and more complex every year. Not all fraud is preventable, but fortunately there are a few things you can do to help protect yourself from the most common tax scams.
Treat all tax related phone calls with suspicion.
The caller may know a shocking amount about you when trying to convince you they are legitimate. Take down their name, badge number and call back number and call the IRS directly at 800-366-4484 to verify their identity. If you receive a letter claiming to be from the IRS that seems suspect, you can enter the letter number on the IRS website to verify its legitimacy.
The IRS will never:
- Call or email as their first means of communication. You will always be sent a notice through the mail first.
- Threaten you with calling the police or having you arrested for not paying.
- Demand immediate payment without allowing you to time review or appeal your IRS notice.
- Demand payment or account numbers over the phone. They will never require a certain payment method (like a prepaid debt card or wire transfer) either.
- Ask for personal information via email, text, or social media.
Do not open email or click on links from unknown sources.
Phishing emails can be disguised as tax advice or free tax preparation services. If you receive an email claiming to be from the IRS, forward it to email@example.com then delete it.
File your return as early as possible.
This limits the possibility that an identity thief will submit a return in your name before you do.
Guard your e-file pins and use strong, unique passwords for all of your online accounts.
If you try to e-file and find someone has already filed under your social security number, your identity may have been compromised. Contact the IRS for information on filling out an Identity Theft Affidavit and check your credit reports for fraud (this can be done for free once per year per bureau at annualcreditreport.com).
Use only tax preparers that will sign the return they prepare for you.
They should have an IRS Preparer Tax Identification Number (PTIN) to enter on your return.
Review your prepared return carefully before signing.
Scammers who often prey on elderly and low income taxpayers and make frivolous claims promising to increase their refunds are committing tax fraud. You are legally responsible for all the information in your return regardless of who prepared it. Filing a return with false or inflated income and expenses to claim a greater refund is a criminal offense.