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 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. They may pose as IRS employees, collection agents, emergency services, or law enforcement.
If they claim to work for the IRS, take down their name, badge number and call back number and call the IRS directly at 800-829-1040 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.
If the caller uses any of these tactics, it’s safe to assume it’s a scam. Hang up the phone immediately without saying anything further.
Do not open email or click on links from unknown sources.
Scam emails appearing to be from the IRS are hitting inboxes with attachments labeled “tax transcript” or similar. Phishing emails can also be spoofed to appear to come from another trusted source asking for an urgent account update or offering free tax advice or preparation services. When in doubt, skip any links and attachments and navigate directly to their website yourself to verify.
The IRS will never send a sensitive document or personal information over email and does not send unsolicited emails to the public. If you receive such an email, delete it after forwarding it to firstname.lastname@example.org. If you receive one at work, notify your company’s IT department.
Get serious about protecting yourself from identity theft.
Guard your e-file pins and use strong, unique passwords for all your online accounts. Use antivirus and firewall protections on your devices and keep them up to date. Be cautious when shopping online. Shred unnecessary paperwork and keep your identity and tax documents secure. Monitor your account statements and report fraudulent transactions immediately. Check your credit reports annually for fraud (this can be done for free once per year at annualcreditreport.com). Do not give your personal information over email, phone, or text.
Beware of erroneous refund scams. 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 to submit an Identity Theft Affidavit.
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.
Choose your tax preparer carefully and review your tax return before signing.
Find a trustworthy, professional tax preparer like Bacon & Gendreau. Scammers who often prey on elderly and low-income taxpayers and make frivolous claims promising to increase their refunds are committing tax fraud. Fly-by-night preparers may falsify your return to generate a larger fee or file a fake return in your name and pocket the refund. By the time the IRS comes knocking, they’re long gone.
Use only tax preparers that will sign the return they prepare for you and have an IRS Preparer Tax Identification Number (PTIN) to enter on your return. You are legally responsible for all the information in your return regardless of who prepared it. Filing a return with false information or inflated income and expenses is a criminal offense.