Tax season is a busy time for everyone, including scammers. From phishing emails to fraudulent tax returns, tax season scams are designed to steal your money, personal information, or even your identity. These common tax scams can leave you dealing with financial losses and stressful recovery efforts.
To protect yourself and avoid tax season scams, it’s important to know what to watch out for and how to respond if you suspect fraud. Here are the top 10 tax scams you should be aware of and practical tips to stay safe.
1. IRS Phone Scams
One of the most common scams involves criminals pretending to be IRS agents. They use scare tactics, like threatening arrest or legal action, to pressure you into making immediate payments.
Warning Signs:
The caller demands payment through untraceable methods like gift cards or wire transfers.
They insist you must pay immediately without an opportunity to question or appeal the tax debt.
What to Do:
Hang up and contact the IRS directly at 800-366-4484 to verify your tax status.
2. Phishing Emails Posing as the IRS
Scammers send phishing emails claiming to be from the IRS, often including fake logos and official-looking forms. These emails are designed to steal your personal and financial information.
Warning Signs:
The email urges you to update your account or click on a link.
It asks for sensitive details like your Social Security number or bank account information.
What to Do:
Forward suspicious emails to phishing@irs.gov without clicking any links or opening attachments.
3. Unclaimed Refund Scams
ou may receive a call or email saying you have an unclaimed tax refund, but scammers use this trick to collect your personal information.
Warning Signs:
The person requests your bank account details to process the refund.
They ask for an upfront fee to release your money.
What to Do:
Check your refund status directly on the IRS website at irs.gov/refunds.
4. Fraudulent Tax Return Filings
Identity thieves may file a tax return using your Social Security number to claim a refund. You might not discover this until the IRS notifies you of a duplicate return.
Warning Signs:
Unexpected tax balances or IRS correspondence about a return you didn’t file.
What to Do:
File your tax return as early as possible to minimize the chance of fraud. If you suspect identity theft, contact the IRS and request an Identity Protection PIN.
5. Ghost Tax Preparers
Some unethical tax preparers, known as ghost preparers, promise large refunds and use shady methods to inflate your return. These scammers often charge fees based on your refund amount and refuse to sign the return.
Warning Signs:
The preparer doesn’t have an IRS Preparer Tax Identification Number (PTIN).
They pressure you to claim dubious deductions or credits.
What to Do:
Choose only qualified tax professionals listed in the IRS Directory of Federal Tax Return Preparers.
6. Fake Stimulus Payment Scams
Scammers often exploit stimulus payment programs by sending fake emails or text messages claiming you’re eligible for extra money.
Warning Signs:
The message asks for your Social Security number or a processing fee.
It contains a link to a website that mimics the IRS’s official page.
What to Do:
Remember, the IRS does not ask for fees to issue stimulus payments. Report suspicious messages to the IRS.
7. Social Media Scams
Criminals use social media platforms to impersonate IRS agents or tax consultants. They may send direct messages claiming you owe money in taxes or qualify for a special refund.
Warning Signs:
Requests for personal or financial information through private messages.
Offers that seem too good to be true.
What to Do:
Ignore unsolicited messages and report fake accounts to the platform’s support team.
8. Charity Tax Fraud
Scammers pose as fake charities to steal donations or personal information under the guise of helping those in need.
Warning Signs:
High-pressure tactics to donate immediately.
Requests for payment via gift cards or digital payment apps.
What to Do:
Verify the charity’s legitimacy using the IRS Tax Exempt Organization Search tool before donating.
9. Unemployment Identity Theft
Fraudulent unemployment claims can lead to tax complications if filed under your name. Victims often receive tax forms for benefits they never applied for.
Warning Signs:
IRS tax forms (such as 1099-G) for unemployment benefits you didn’t claim.
What to Do:
Report the fraud to the IRS and your state’s unemployment office.
10. Fake Tax Debt Collection Agencies
Some scammers pose as IRS debt collectors, demanding immediate payment for fake tax debts. They often use aggressive threats to intimidate victims.
Warning Signs:
Threats of arrest, license suspension, or deportation.
Demands for payment via untraceable methods.
What to Do:
Contact the IRS directly to confirm whether you owe taxes.
How to Protect Yourself from Tax Scams
Verify Communications: Always confirm the legitimacy of emails or calls claiming to be from the IRS.
Use Strong Passwords: Secure your financial accounts with strong, unique passwords and enable two-factor authentication.
File Early: The earlier you file your taxes, the less opportunity scammers have to misuse your information.
Monitor Your Accounts: Regularly check your credit report and bank statements for unusual activity.
Stay Connected with StandUp Wireless
Staying informed and connected is essential for protecting yourself from scams. StandUp Wireless makes it easier for you to stay in the loop with free monthly cell phone service through the Lifeline Program.
How You Qualify:
If you’re receiving government assistance like SSI, SNAP, or Medicaid, you automatically qualify for this program.
What You Get:
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Visit one of our StandUp Wireless California stores or tent locations to enroll in the Lifeline Program.
Stay Informed and Stay Safe During Tax Time
Tax season scams can be devastating, but with knowledge and vigilance, you can protect yourself from fraud. Share these tax scammer top tips with friends and family to help them stay safe too.