With tax return season right around the corner, it’s important to be on alert for different tax scams relating to identity theft and refund fraud. For individuals with elderly parents, it’s wise to stay on top of their situation as well. The following is a synopsis of popular tax time scams:
- Be aware of scammers who make automated calls to taxpayers, leaving urgent callback requests about settling a “tax bill.” These fake callers usually demand payments on prepaid debit cards, gift cards or wire transfers.
- Scammers have also sent fraudulent versions of CP2000 notices related to the Affordable Care Act. The fake notice includes a payment request and a P.O. Box address to which a taxpayer is to remit payment.
- Students and parents have both been targeted by thieves who demand payment for a fake “Federal Student Tax.”
- If anyone receives a phone call to “verify” tax return information, know that it is an attempt to get a taxpayer to give up personal information such as a SSN or personal financial information. Scammers may try this method via email to seek data related to a taxpayer’s refund, filing status, or personal information.
- Payroll and human resources professionals should be aware of phishing email schemes that pretend to be from company executives and request personal or W-2 information on employees.
- Even tax professionals are not exempt from scams. Scammers may send out emails to tax professionals pretending to be from tax software companies or clients. The emails request that the recipient download and install an “important software update” or fake tax documents. In both cases, it is a virus or program designed to steal login information, passwords and other sensitive data.
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If you receive an unexpected call, unsolicited email, letter or text message from someone claiming to be from the IRS, know that the IRS generally first mail you a bill if you owe any taxes. The IRS will never:
- Call to demand immediate payment via prepaid debit card, gift card or wire transfer
- Initiate contact by e-mail or text message
- Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying
- Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe
- Ask for credit or debit card numbers over the phone.
If you get a suspicious email or call from someone claiming to be from the IRS and asking for money, you should:
- Do not give any information
- Report the call to the U.S. Treasury Inspector General for Tax Administration on their “IRS Impersonation Scam Reporting” page or call 800.366.4484.
- Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant”
- Report emails by forwarding it to phishing@irs.gov.
The IRS does use four outside collection agencies to help collect tax debt. These agencies follow the same guidelines as the IRS when attempting to collect money (no emails, threats, social media, etc.).
Be sure to protect your identity and use security software on your computer. Also, filing your taxes early is the best way to prevent tax identity theft as only one return per SSN can be filed per year. If you are a victim of tax identity theft, the IRS’s step-by-step guide is a great resource for help.
If you think you might actually owe taxes, call the IRS directly at 800.829.1040. Additionally, you can always email Rea & Associates if anything suspicious occurs or if you have questions. We are happy to look into any concerns you may have.
By Cindy Kula, CPA/PFS. CFP (Cleveland office)