Watch Out for These Signs of Tax Scams

Watch Out for These Signs of Tax Scams

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How can I protect my identity this tax season?

The annual tax season has also become a season to be alert for phishing scams that appear to be messages from the Internal Revenue Service (IRS).

Scammers use email, websites, and even social media to trick taxpayers into sharing personal and financial information, which they can use to steal your identity. Meant to either frighten or entice, these fraudulent messages may threaten a tax audit or offer a tax refund.

The IRS generally does not send unsolicited e-mails to taxpayers or request financial account security information, such as PIN numbers. They also will not discuss tax account information with taxpayers via e-mail or use it to request sensitive financial and personal information from taxpayers.

What are signs of a tax scam?

Scams may appear legitimate and some may even use the IRS logo. But the warning signs that you've received a fraudulent message may include:

  1. Requests for personal and/or financial information, such as your Social Security number and bank or credit card account numbers.
  2. Tempting offers that might persuade you to click on links or respond to messages.
  3. Threats that suggest consequences for not responding to the email.
  4. Incorrect grammar, spelling or phrasing especially when referencing the IRS or other government agencies and links to inaccurate URLs. Rather than relying on links listed in the message, manually type the URL for the official IRS website directly into your browser address bar to find out more or follow up on questions about your taxes.

Each year, the Internal Revenue Service (IRS) releases a "Dirty Dozen" list of common tax scams that put victims at risk of identity theft and money loss. The following rank high, so keep an eye out for them:

What are tax scam phone calls?

Tax scam artists may pose as IRS employees or law enforcement in an attempt to steal your money or identity. These fraudulent callers might say you owe money or are entitled to a large refund.

  • Red Flags: Callers generally use common names and false IRS badge numbers. They may be able to recite the last four digits of your Social Security Number, and some might even issue threats including demanding immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.
  • Protect Yourself: Never give out any identifying information over the phone, no matter what the caller claims or threatens. Hang up and contact the IRS to verify any issues with your return or refund. If there aren't any, report the tax scam to the Treasury Inspector General for Tax Administration at 800-366-4484.

What are phishing scams with emails or websites?

Scammers may use well-crafted, fake versions of tax-related websites and emails bearing the IRS logo to steal personal information similar to how they use phony e-cards and sale emails during the holidays.

  • Red Flags: Emails claiming to be from the IRS (which doesn't contact taxpayers to request personal information) or websites that ask for personal or financial information in order to receive a refund.
  • Protect Yourself: If you receive an email regarding your tax refund, do not reply, open any attachments or click any links. If you think you have found a suspicious website, let the IRS know.

How can I identify phony tax return preparers?

While most tax preparation consultants file their clients' returns honestly, some will commit tax fraud scams or identity theft. You are responsible for your tax return even if you didn't prepare it, so do your research before letting someone else file for you.

  • Red Flags: Preparers who don't offer electronic filing, who offer to file your return without a W-2 form, or who don't sign your return or enter their Preparer Tax Identification Numbers (PTINs).
  • Protect Yourself: Before selecting a tax preparation consultant, review their history and the status of their license. Make sure they have a PTIN and avoid preparers who base their service fees on your refund amount. Visit the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to locate a qualified local tax preparer.

How can I report IRS tax scams?

If you receive an online message you suspect is a scam, the IRS suggests taking the following steps:

  • Do not open any attachments or click any links. These could lead you to a fake IRS website, where opening a link could download malware or allow someone to hack into your computer.
  • Ignore messages that offer a refund. Instead, go to the IRS's Where's My Refund? site to determine if you are actually receiving a refund.
  • Report the fraud by forwarding the message or web address to phishing@irs.gov.
  • Delete the message.

The IRS also provides additional information about precautions to take and how to report fraud if you receive messages that appear to be from the agency.

Discover more cyber safety tips and ways to protect your identity while browsing online.

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Neither State Farm® nor its agents provide tax or legal advice.