Tax scams are among the most stubborn cons out there. They reappear often, each time with a slightly different spin. The main theme is scammers posing as the Internal Revenue Service (IRS), trying to trick people into either paying up or sharing personal information.
Common tax scams to look out for:
- IRS Impersonation Scams: Often initiated by phone calls, one involves fake tax demands with threats of arrest, while the other tricks victims into providing personal information under the false pretense of issuing tax refunds, with a specific focus on college students and the claim of unpaid “federal student tax.”
- Tax Identity Theft Scams: Watch out for tax identity theft, where scammers use your government ID to file false tax returns or secure employment, often unnoticed until the IRS informs you of suspicious activity.
- Email Phishing Scams: The emails appear to be from the IRS and include a link to a fake website intended to mirror the official IRS website. These emails contain the direction “you are to update your IRS e-file immediately.” The emails sometimes mention USA.gov and IRSgov (without a dot between “IRS” and “gov”).
BBB offers tips to help you avoid tax scams:
- The best way to avoid tax identity theft is to file your taxes as early as possible before a scammer has the chance to use your information to file a fake return.
- Write down your Identity Protection PIN (IP PIN) from the IRS before you file your return. This is a six-digit number, which, in addition to your Social Security number, confirms your identity. Visit the IRS for more information about the program. Read BBB’s tips about the IRS PIN.
- The IRS does not initiate contact with tax payers by email, text message or social media to request personal or financial information.
- Only deal with trustworthy tax preparation services. See our tips for finding the right tax preparer for you.
- Check out websites carefully and make sure you are accessing the real IRS website when filing your taxes electronically or inquiring for additional information.
- If you are the victim of tax identity theft, contact the IRS at 1-800-908-4490. You should also file a complaint with the Federal Trade Commission (FTC) at gov/complaint or by calling 1-877-FTC-HELP. The FTC also offers a personalized identity theft recovery plan at identitytheft.gov.
- If you get tax information delivered electronically from your employer or other entity, treat that information carefully. Download it onto a password-protected computer.
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