Don't Fall for Tax Time Scams

March 2017

Scams occur all year round, but it’s important to know that many types of scams peak during tax season, meaning you should keep an extra eye out for suspicious activity. Each year, the IRS publishes a list of the worst and most common tax scams, called the "Dirty Dozen.". This article highlights several of the scams that make the list year after year.

Phishing Scams

Phishing scams are among the most common types of scams and are an attempt to steal your personal and financial information, typically through email. These emails are made to look like they come from the IRS or other government agencies, banks, credit card companies, or businesses or other trusted organizations. The goal of the email is to get you to go to a legitimately looking website so that they can collect your personal information. Some emails or websites may also try to infect your computer with malware, which steals your login and other personal data from you.

Here are some tips to help you avoid phishing scams:

  • The IRS, other government agencies, financial institutions and reputable companies will never send emails, make phone calls, or send letters asking for personal and account information.
  • Never click on links or call phone numbers in unsolicited emails. If you must contact the sender, call them using a phone number from a reputable source or go directly to their website..
  • Never send account numbers and passwords in email messages.
  • Use security software and security features provided by your email program and browsers.

Tax Time Scams

  • Phishing for your personal and financial information typically through email.
  • Posing as IRS agents in a phone call.
  • Committing identity theft by stealing personal and financial data from taxpayers or tax professionals.

Phone Scams

In these scams, the scammers pose as IRS agents. Scammers will call you and demand payment of a bogus tax bill and threaten arrest, driver's license revocation, or even deportation if the bill isn't paid. Other calls may promise a big refund if you provide them your personal information. If you receive a call, hang up immediately. Don't give out any information.

The IRS will never:

  • Call and demand immediate payment using a specific payment method. The IRS will usually first mail a bill to any taxpayer who owes taxes.
  • Threaten to immediately bring in local police or other law-enforcement.
  • Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
  • Ask for a credit or debit card number over the phone.

Tax-Related Identity Theft

These scams are an attempt to steal personal and financial data from taxpayers or data held by tax professionals. Scammers often try to steal tax refunds by filing tax returns using the stolen data. The IRS, state tax agencies, and the tax industry have been working to combat this problem by developing and improving tools to prevent fraudulent returns from entering the tax system. Even though progress has been made, you still need to be extremely cautious.

You can protect yourself by:

  • Learning the signs of tax-related identity theft.
  • Using security software on all of your devices including a firewall. Make sure to keep it up to date and running.
  • Using strong passwords. Consider encrypting tax records and other sensitive files.

Fake Tax Payment Using Gift Cards

While this scam isn't one of the Dirty Dozen, it's a twist on the phone scam and is important to be made aware of. In this scam, scammers are impersonating an IRS agent and demanding that a tax payment be made by an iTunes or other gift card. If you receive one of these calls, hang up immediately without providing any information. Always remember that the IRS will never require you to use a specific payment method for your taxes such as a prepaid debit card, gift card, or wire transfer.

For more details about these and other "Dirty Dozen" scams, check out the Dirty Dozen page on the IRS website.

 

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