Yes, it’s that time again in the United States. Tax season is here. It’s one of those inconveniences in life that need to get done, as agonising as it is. You may file your taxes on your own or hire a professional, but either way, as a law abiding citizen, it’s something that you have to do. Which makes you a perfect target for tax scammers.
In short, tax season is here and tax scammers are here too. Crafty criminals are hard at work figuring out new ways to steal your money. This year is no different. The IRS already issued warnings to U.S. citizens to keep an eye out for any red flags. They expect to receive something like 150 million tax returns this season, which runs through 15 April.
Below is a summarised list of the most popular scams to look out for, and how to stay safe:
IRS Phone Scams
The Problem: A common scam that crops up every year involves scammers calling taxpayers claiming to represent the IRS (or equivalent tax authority in your own country if you are not a U.S. resident). Imitating an IRS telephone number, the scammer uses various intimidation techniques to force the victim into making an instant payment. Threats of imprisonment if the victim does not immediately comply is a common tactic that is used.
The Solution: The IRS will never make a phone call or make a house visit to demand an outstanding payment. They will also never ask you to make a payment via bank wire or gift card. If an ‘IRS employee’ becomes abusive and threatening, that is a red flag for a scam.
Fake Tax Form Scams
The Problem: In this scam, criminals start by securing their victims’ personal information and Social Security numbers. The scammer proceeds to fill out a fraudulent tax form with the victim’s personal details. The scammer then calls the victim posing as an IRS employee to demand payment for the ‘illegally obtained’ funds.
The Solution: An unexpected invoice, refund or communication from the IRS regarding multiple filed returns should alert you that this may be a scam. Contact the IRS directly to confirm what your current tax status is.
Social Security Number Scam
The Problem: Threatening calls are made advising that Social Security numbers will be suspended or cancelled unless overdue taxes are settled. Don’t be fooled into believing this is a legitimate call, even if the caller has your personal information. These details could have been captured at some point and you should write this off as a total scam.
The Solution: Don’t believe anyone who threatens to suspend or cancel your Social Security number. If you find yourself in that position, hang up the phone immediately. You can report the incident by sending an e-mail to [email protected]
Tax Phishing Scam
Over the years, phishing scams have evolved into a highly sophisticated method of defrauding unsuspecting people. Traditional phishing scams via email have now extended to text and social media messaging. Phishing scams will send messages that appear authentic from a credible source only to convince victims into sharing sensitive information.
The Solution: Keep note of the fact that the IRS will never reach out to request sensitive personal or financial information. If you receive any communication similar to this, ignore and report it to the IRS.
Tax Season Is Here: Remain Vigilant
Taxpayers need to remain vigilant to safeguard against tax scams that are very prevalent this time of year. Criminals prey on the anxiety and urgency of taxpayers to file their tax return in time. If you follow the above suggestions and keep your wits about you, you won’t get caught out.