Tax season is here, and with it comes the risk of falling victim to IRS scams looking to deceive and defraud unsuspecting victims.
The Internal Revenue Service (IRS) shared several warnings about different types of scams that target taxpayers, emphasizing the importance of awareness and exercising an abundance of caution.
Identifying Misleading Claims and Promotions
A common tactic used by scammers involves misleading individuals into believing they are owed a tax refund, as a way to lure people into providing personal or financial information. These fraudulent communications often come in the form of cardboard mailing envelopes, include fake IRS letterhead and contact information, and may use the phrase "in relation to your unclaimed refund.”
Another risk during tax season is receiving misleading claims about tax credits, like the Employee Retention Tax Credit or ERTC. Aggressive promoters may exaggerate eligibility criteria and charge exorbitant fees from innocent individuals hoping to benefit from legitimate tax incentives.
By familiarizing yourself with official requirements for tax credits and being cautious of unrealistic promises, you can help protect yourself from these deceptive tactics.
Avoiding Scams and Identity Theft
In addition to financial scams, the IRS warns taxpayers to avoid becoming victims of identity theft, fraudulent organizations, and “ghost” tax preparers. Now more than ever, you need to be vigilant about preventing identity theft as criminals know it’s prime time to collect and cash in on other people’s W2s, tax refunds, and unemployment benefits.
Taxpayers also warn to be wary of any organization, disaster relief funds, or companies claiming to settle with the IRS for “pennies-on-the-dollar.” These are often scammers trying to take advantage of a taxpayer’s good or bad fortune, while in reality, they are simply looking to pocket your money.
In addition, if any tax preparer is charging you for their services but is not willing to sign their name to your refund, this is known as a “ghost” preparer and is completely unethical. A legitimate tax professional will always be willing to sign their name on your return.
Recognizing the Signs of IRS Scams
Understanding how the IRS typically communicates with taxpayers is essential. The IRS primarily initiates contact through traditional mail services provided by the United States Postal Service.
Occasionally, there may be specific circumstances, such as audits or collection investigations, where in-person visits or phone calls need to occur, but this is typically after several notices or letters have been sent, and when the taxpayer is overdue or delinquent.
You should be cautious of unsolicited requests for immediate payments or sensitive information, as legitimate IRS interactions follow established protocols and notifications.
Reporting Scams and Suspected Fraud
In the event of a potential IRS scam or fraudulent activity, individuals are encouraged to report the incidents through official channels.
According to the IRS website, all impersonation scams should be reported via the IRS Impersonation Scam Reporting webpage. Any phone scams need to be reported to the Federal Trade Commission using the FTC Complaint Assistant and include the phrase "IRS Telephone Scam" in the notes. And for email scams, you can forward them to the IRS at phishing@irs.gov.
As tax season unfolds, staying informed and vigilant is crucial to safeguarding yourself against IRS scams and fraudulent schemes. By recognizing common red flags, verifying the legitimacy of IRS communications, and promptly reporting suspicious activities, individuals can defend against financial fraud and identity theft.
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