Avoiding Tax Scams and Fraud This Year

Each year, the Treasury Inspector General for Tax Administration receives thousands of reports of scams aimed at stealing people’s money or identities with millions collectively lost. In 2016, there was a 400 percent surge in phishing and malware incidents according to the IRS. As more of our personal lives take place in the cyber world, it’s important to know what information is trustworthy and what isn’t.

Protect your identity and money this year by taking caution in the following situations:

• Someone calls or emails saying they're from the IRS and you owe money. The caller will say if you don't pay immediately, a warrant could be issued for your arrest.  Sometimes they will recite personal information, such as the last 4 digits of your Social Security Number, to appear credible. The number on the caller ID might even look legitimate or imitate the IRS toll-free number. If contacted by email, the senders email address might be similar to actual IRS email addresses and contain images that mimic the IRS website.
• Someone promises you a big refund if you let them prepare your taxes. Scam artists generally prey on people who do not have a filing requirement, such as low-income individuals or the elderly. They also target non-English speaking individuals. Usually, they will charge a large amount of money for bad advice or worse yet, file the return and have the refund deposited into their account.  
• Someone gets hold of your personal information, previous tax returns, income history W-2s, or other personal information and files fraudulent returns on your behalf.
• Someone contacts you directly after a disaster and claim they're working on behalf of the IRS to help the victims file casualty loss claims and get tax returns.  

To combat these scams:

• Do NOT give out info over the phone or via email. The IRS will never ask for this information over the phone or email and will always send out a written notice. Additionally, the IRS will NEVER require a specific type of payment, while scammers will often ask for a money transfer or payment with a prepaid debit card or gift card.
• It’s important to watch out for identity theft, especially around tax time. Be extremely careful with your personal information. Shred anything with personal information such as birthdays, usernames, social security numbers, banking information, mother’s maiden name, etc. on it.  If you have emails with tax information, be sure they are secure by choosing difficult passwords and changing them often.  
• Always get a copy of what was filed for you if you use a tax preparer. Remember, taxpayers are legally responsible for what is on their tax return even if it is prepared by someone else.  
• Contact the IRS directly if you’re worried the call isn’t real. Call 800-829-1040 or go to irs.gov.