Watch Out for These 4 Common Scams During Tax Season
As a new tax season begins, beware of IRS impersonation scams and other schemes that attempt to steal your personal and financial information. Watching out for these common scams can keep people from becoming victims of identity theft and protect their sensitive personal information that can be used to file tax returns and steal refunds
1. Text message scams
There was an increase in text messages that impersonated the IRS last year. These scams are sent to taxpayers’ smartphones and may reference COVID-19 or stimulus payments. They contain bogus links claiming to be IRS websites or other online tools. Other than IRS Secure Access, the IRS does not use text messages to discuss personal tax issues, such as those involving bills or refunds. The IRS also will not send taxpayers messages via social media platforms.
Do not click links or open attachments in unsolicited, suspicious, or unexpected text messages claiming to be from the IRS, state tax agencies, or others in the tax community.
If a taxpayer receives an unsolicited text message that appears to be from either the IRS or a program closely linked to the IRS, the taxpayer should take a screenshot of the text message and include the screenshot in an email to firstname.lastname@example.org with the date/time/time zone they received the text message as well as the phone number that received the text message.
2. Unemployment fraud
Taxpayers should be aware of claims of unemployment or other benefit payments for which they never applied. States are experiencing a surge in fraudulent unemployment claims filed by organized crime rings using stolen identities. Criminals are using these stolen identities to fraudulently collect benefits.
States issue Form 1099-G, Certain Government Payments, to recipients and to the IRS to report the amount of taxable compensation received and any withholding for unemployment benefits. Any worker receiving a fraudulent or inaccurate 1099-G should report it to the issuing state agency and request a corrected Form 1099-G.
A taxpayer may be a victim of unemployment identity theft if they received:
- Mail from a government agency about an unemployment claim or payment for which they did not file. This includes unexpected payments or debit cards and could be from any state.
- An IRS Form 1099-G with unemployment benefits they weren’t expecting or didn’t receive. Box 1 on this form may show unemployment benefits they did not receive or an amount that exceeds their records for benefits they did receive. The form itself may be from a state in which they did not file for benefits.
- A notice from their employer indicating the employer received a request for information about an unemployment claim.
For details on steps to take related to unemployment fraud, taxpayers can visit the U.S. Department of Labor’s DOL.gov/fraud page.
3. Email phishing scams
The IRS does not initiate contact with taxpayers by email to request personal or financial information. The IRS initiates most contacts through regular mail delivered by the United States Postal Service.
If a taxpayer receives an unsolicited email that appears to be from either the IRS or a program closely linked to the IRS that is fraudulent, review the Report Phishing and Online Scams page at IRS.gov for complete details on what to do.
There are specific circumstances when the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, a delinquent tax return, or a delinquent employment tax payment. The IRS may also visit if it needs to tour a business as part of a civil investigation (such as an audit or collection case) or during a criminal investigation. The IRS provides specific guidance on how to know it’s really the IRS knocking on your door.
4. Phone scams
The IRS does not leave pre-recorded, urgent, or threatening messages. Victims are told in phone scams if they do not call back, a warrant will be issued for their arrest. Other verbal threats include law-enforcement agency intervention, deportation, or revocation of licenses.
Criminals can spoof caller ID numbers to appear to be anywhere in the country, including from an IRS office, local sheriff’s offices, state departments of motor vehicles, federal agencies, and others. This prevents taxpayers from being able to verify the true call number.
The IRS and its authorized private collection agencies will never:
- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer.
- Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
- Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
- Ask for credit or debit card numbers over the phone.
Generally, the IRS will first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury and checks should never be made payable to third parties.
How to report scams
Do not give out any information. Hang up immediately.
Contact the Treasury Inspector General for Tax Administration to report the call at IRS Impersonation Scam Reporting.
Report the caller ID and/or callback number to the IRS by sending it to email@example.com (Subject: IRS Phone Scam).
Report it to the Federal Trade Commission on FTC.gov. Add “IRS Telephone Scam” in the notes.
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