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Ah, spring! A time for blooming flowers, longer days, warming temperatures….and taxes. Taxes can be a source of intense stress for many of us, and as we know, that means it is the perfect time for fraudsters to strike by taking advantage of our heightened emotions and tensions during this hectic time.
While scammers use a variety of methods to target you during tax season, most use fear or the guarantee of a big pay day to get your funds or personal information.
Impersonation scams are a popular tactic of scammers. They reach out to potential victims pretending to be the IRS, a state tax agency, financial institution, or other trusted entity. Like all other phishing or smishing scams, do not click on any links or download any documents in these communications until you are sure the sender is legitimate by reaching out through verified contact channels. Even though your instinct will be to quickly click or respond, especially if the sender alludes to a bigger tax refund or even potential legal action, it’s important to properly vet the sender before communicating or interacting with the message.
The IRS lists the specifics ways they might reach out to you. You can also search through IRS notices and letters to confirm that what you received is a real communication.
Make sure to only take advice from licensed tax professionals. Social media trends (like the ATM glitch trend we discussed before) can get you into trouble with the IRS. Some of these ‘trends’ include falsifying income and withholding on your W-2 form to get a larger refund, falsely claiming a Fuel Tax or Self-Employment Credit, or even inventing fake household employees to claim Sick Leave or Family Leave credit. Purposely submitting false information on your taxes can significantly delay your refund or even get you into trouble with the law.
Beware of tax ‘professionals’ charging exorbitant fees or promising sky-high refunds. Here are some red flags to look out for when dealing with a purported tax ‘professional’:
While some scammers are after your funds, some are after your personal information. Another common fraud tactic is when a criminal convinces their victim via email or text that they need to fill out an additional tax document. Sometimes using a form like a W8-BEN, scammers will claim the government needs to more closely review your information or that you are exempt from taxes and need to file a specific form.
Once a victim fills out the form, scammers will then have access to a multitude of personal information, including passport numbers, PINs, SSNs, mother’s maiden name, and more!
Ensure that you safeguard your personal information and only show sensitive tax forms to legitimate tax professionals.
Scammers will also take advantage of your good will. It is important when giving to charities to properly vet the organization and confirm that they are registered non-profit. You can use the IRS’s Tax Exempt Organization Search to lookup a charity you are interested in donating to.
Method of payment requested can also be a red flag. As we know, transfers or gift card requests are typically a sure sign that it is a scam.
Like the sketchy tax professionals we mentioned above, scammers may also offer ‘help’ or sell a service to set up your online IRS account. Your IRS Online Account is a helpful tool for taxpayers to see all their tax information in one place. However, it also contains personal data that a scammer would love to get their hands on to file a fraudulent claim with your identity.
Remember, as with other online accounts, to safeguard your information and never give access or passwords to third parties.
While taxes can be a complicated process, avoiding tax scams doesn’t have to be. Remember to always take a moment to assess any communications you receive before acting and keep all your information safe.
Verify communications from the IRS using the tool we linked in this article. If you hear from another organization through email or text, be sure not to click on any links or reply with sensitive information until you have verified the sender by reaching out through official contact channels (usually found on their main website).
Keep your private and personal information safe! Enable multi-factor authentication when you can and don’t share passwords.
Pick a reputable tax-preparer. Reference this article from the IRS; they offer a directory of credentialed tax preparers and have other resources to help you pick the right tax professional.
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