Intrepid scammers have decided that tax season would be too boring without the looming suspense of identity theft. Joking aside, tax scams are a major problem. During the 2016 tax season alone, the IRS reported a jaw-dropping 400% spike in phishing scams, and that number has only crept up in the years since. Protecting your personal information during tax season means educating yourself on common tax scams and staying vigilant for signs of those scams.
Many — but not all — tax scams arrive in the form of phishing emails. Phishing scams try to trick you into revealing sensitive information about yourself. This can include financial info like your credit cards and bank accounts or personal info like your Social Security number. Scammers may also try to get their hands on login credentials like your password and PIN number.
As a rule, the IRS will never ask you for access to your bank or credit cards. They’ll also never contact you via email. If the IRS does reach out, it will always be in the form of a paper letter bearing an official seal and notice number.
All right, we’ve established how the real IRS communicates. Let’s look at some phishy communiques from IRS imposters.
Tax scams to watch out for in 2020
You’re being investigated by the IRS Criminal Investigation Division
This scam preys on a sense of fear that you’ve done something wrong and need to rectify it immediately or face the consequences. The email, allegedly from the IRS Criminal Investigation Division, claims that you’re the subject of a criminal investigation for submitting a fake tax return. A link or attachment purporting to be the criminal complaint is actually thinly disguised malware.
You need to update IRS eFile immediately
You may receive an email instructing you to update your IRS e-file immediately. The email includes a link to a website that looks just like the real IRS site, but it’s actually a fake look-alike set up by scammers. Once on the site, you’ll be tricked into entering personal information about yourself, like your name, address and Social Security number.
The IRS needs your bank account numbers
This one also involves a fake IRS website. You’ll be told that the IRS is holding onto your tax refund until they receive one crucial piece of information from you. The info? Your bank account number.
Scammers posing as tech support
As the popularity of tax software like TurboTax and QuickBooks rises, so does the appearance of scam tax support websites. Dial the toll-free phone number listed on these sites and scammers-posing-as-tech-support will trick you into gaining remote access of your computer. Once inside, they can get their hands on any sensitive personal information stored on your PC.
Scammers posing as tax preparers
Like the tech support scam, there are also scammers out there disguising themselves as tax preparers. Fraudsters usually lure in victims by promising they can get you huge returns on your taxes. In fact, they often lie on your returns to give you the illusion that you qualify for credits which you wouldn’t normally qualify for.
The catch is that they don’t sign the return, so you’re on the hook when the IRS realizes something’s amiss with your return. Victims are often haunted by audits and repaying money owed, while the scammer gets away scot-free.
How do you know if a tax preparer is the real deal or a scammer? Legitimate preparers have a number issued by the IRS called a tax preparer identification number (PTIN).
Bogus tax software updates
Phony software updates are a common vector for malware, and it’s no different for tax software. Security experts have identified a network of over 50 tax-related domains that direct visitors to download malware disguised as software updates.
Tax scam red flags
Tax scams can be sophisticated — some of them even use fake background sounds to make it sound like they’re calling from a call center. But even the best scams have a few common warning signs to tip you off. Here’s what you should look for:
- They use fake names and IRS badge numbers
- They don’t know the last four digits of your Social Security number
- They use a spoofed phone number
- They call you and ask for immediate payment
- They ask you to pay with gift cards
- They ask for passwords or PIN numbers for your financial accounts
If you legitimately owe money to the IRS, they’ll send you a bill via old fashioned snail-mail. Any “bills” or demands for cash via email or phone call are shady.
Payments to the real IRS are only made in one of two ways: paper check or online using a vetted third-party service. The real IRS also offers options for payment plans, which is something that scammers tend to avoid since they want the full sum before you figure out they’re frauds.
What should you do if you’re targeted?
Tax scams are prolific during tax season. If you haven’t been targeted yet, there’s still a good chance you’ll be contacted in the future, so it’s good to be prepared. If you receive a shady email claiming to be from the IRS, there are a few steps you should take:
- Don’t reply to the email. Don’t click on any attachments
- Forward the email to the IRS’s phishing team at email@example.com
- Delete the email and let the IRS handle the situation going forward
Phone calls, texts and faxes that you suspect are scams can be reported to the same email address (firstname.lastname@example.org).
Tax season is stressful enough without falling prey to a tax scam. Luckily, security experts have identified a few common scams to keep an eye out for this tax season. By staying vigilant and knowing what red flags to look for, you can avoid the scams and skip ahead to happily collecting your tax refund in a few months!
- Consumers Warned of New Surge in IRS Email Schemes during 2016 Tax Season; Tax Industry Also Targeted, IRS
- IRS concludes “Dirty Dozen” list of tax scams for 2019: Agency encourages taxpayers to remain vigilant year-round, IRS
- Taxpayer Beware: Email Phishing Scams, TurboTax
- Filing Your Taxes? Watch Out for Phishing Scams, Wired