As tax season approaches, it’s essential to be aware of the various scams that criminals employ to exploit unsuspecting taxpayers. In 2024, the IRS flagged nearly 2 million tax returns for potential identity theft and fraud, with fraudulent returns totaling $16.5 billion.
Common Scams
1. Phishing Emails or Texts: Scammers send messages claiming your tax refund has been “recalculated” and prompt you to click a link to provide personal information. These links often lead to fake websites designed to steal your data.
2. Fake IRS Phone Calls: Fraudsters impersonate IRS agents, demanding immediate payment and threatening legal action. Remember, the IRS will not contact you by phone without first sending an official notice by mail.
3. Tax Identity Theft: Criminals use stolen personal information to file fraudulent tax returns in your name, aiming to claim your refund. This scam can delay receiving your legitimate refund and may require you to prove your identity to the IRS.
4. Ghost Tax Preparers: These unscrupulous individuals pose as tax professionals, promising large refunds or credits. They often refuse to sign your tax return, leaving you responsible for any errors or fraudulent claims. Ensure your tax preparer has a valid Preparer Tax Identification Number (PTIN) and signs your return.
5. Social Security Number (SSN) Suspension Scams: Scammers claim your SSN has been suspended due to suspicious activity and request personal information to “reactivate” it. The Social Security Administration does not suspend SSNs; such calls are fraudulent.
How to Verify Legitimate Communication
Most official IRS communication comes through the U.S. Postal Service through letters and notices. If you receive an unexpected email, text, or phone call claiming to be from the IRS, it is likely a scam.
However, the IRS may attempt to call you or visit in person if you have several years of unpaid taxes and have ignored multiple letters. If an IRS agent contacts you, remember the following regarding their regular procedures:
- They will introduce themselves by name and never use threats or demand immediate payment.
- If they visit in person, they will have a government-issued ID badge called an HSPD-12, which verifies their identity as a federal employee.
If you’re unsure whether someone claiming to be an IRS representative is legitimate, you can call the IRS directly at 1-800-829-1040 to verify their identity. On the other hand, if someone claims to be a Social Security (SSA) representative, you can confirm their identity by calling the SSA at 1-800-772-1213.
How to Protect Yourself from Tax Scams
- Be Wary of Unsolicited Messages: The IRS does not initiate contact via email, text, or social media. Avoid clicking on links or responding to messages requesting personal information.
- File Your Taxes Early: Filing your taxes early reduces the risk of tax identity theft because scammers can’t file a fraudulent tax return in your name if you’ve already submitted yours.
- Use Trusted Tax Professionals: Work with licensed tax preparers with a valid PTIN and are authorized to file tax returns.
- Verify Payment Methods: The IRS will never ask for payment via gift cards, cryptocurrency, or wire transfers—these are all red flags of a scam.
By staying informed and cautious, you can protect yourself from common tax season scams and ensure your personal information remains secure. If you suspect a tax scam, report it to the IRS at www.irs.gov and notify your financial institution if your personal information has been compromised.