Beware These Tax Scams!
Once again, the IRS and the FTC are warning the public of a series of tax-related scams to be wary of during this busy and stressful time. Here’s what you need to know:
Scam variations
There are several ways scammers can use tax season for fraud.
1.) Phony refund
In one scenario, scammers use your identity to file a phony tax return in your name. The refund will be deposited directly into your account. Then, the scammers will call you, posing as IRS officials. They’ll claim this money was mistakenly deposited in your account and must be returned. You may be threatened with criminal charges, an arrest warrant, or blacklisting of your Social Security number.
If you comply with the scammer’s instructions, you’ll be sending this money directly to them. You’ll also have difficulty filing a legitimate return.
2.) Identity theft
In another version, scammers will use tax season to lure you into sharing your personal information.
Here’s how it works: You log onto a “tax prep” site and fill in all the information necessary to e-file your return. Unfortunately for you, the site is bogus and you just shared all of your identifying details with a band of crooks. Once these scammers have this information, they can do untold damage to your finances and credit score.
3.) Tax collectors
In this scam, criminals pose as IRS agents and call up unsuspecting taxpayers, claiming they owe a large amount of money to the IRS. They may threaten to arrest the victim, suspend their driver’s license or freeze their accounts. The heavy accents, poor command of English and fake IRS badge numbers can help you recognize these scammers for what they are.
Fighting identity theft
Protect yourself from these scams with the following precautions:
- Know the IRS will only reach out to you by snail mail, and never by phone.
- File early in the tax season.
- Only e-file using a secure internet connection.
- When using an online tax preparation service, look for the required tax-preparer identification number on the web page. If you can’t find it, immediately log off.
- Check the URL of any tax prep site for an “https.” Look for that “s” on every subsequent page you visit on the site.
- If you use a personal tax preparer, ask about their data security practices.
- Respond to all mail inquiries from the IRS as quickly as possible.
If you’ve been scammed
If you suspect that you’ve received an illegitimate “tax refund,” contact the IRS and inquire as to how you can return your refund. Depending on the extent of the scam, you may also need to file an Identity Theft Affidavit.
Next, visit IdentityTheft.gov or ftc.gov/complaint to report the scam to the FTC. They want to catch the crooks as badly as you do!
SOURCES:
https://www.consumer.ftc.gov/blog/2018/03/watch-out-these-new-tax-scams