Each year Internal Revenue Service (IRS) tax scam artists dupe thousands of taxpayers into revealing sensitive information that leads to stolen identities and money. And, as their methods become more sophisticated and pervasive, they are becoming harder to detect as fraud. As with any type of scam, you are the first and last line of defense, so it is important to understand how tax scammers work and what to do when you are confronted with one.
Tax fraud can come in many different forms, but they typically fall within two main categories – phone fraud and email phishing.
With a phone scam, the caller informs you that you owe the IRS for back taxes and demands cash using your bank account or credit card. Another popular scam tries to convince you that you are owed a refund and then attempt to extract a bank account number or your Social Security number. In all cases, the scammer alters the caller ID to make it appear the call is coming from the IRS. Of course, they also use false names and titles and will even offer up a false I.D. number.
To fight off phone fraud, all you need to know is that the IRS never calls taxpayers to demand payment. Any calls made by the IRS to taxpayers will only occur after it has mailed a bill. Even then, they will never ask for credit or debit card numbers over the phone. And they will never verbally threaten to arrest you for not complying.
If you receive a phone call from someone purporting to be an IRS agent asking for personal information, contact the Treasury Inspector General for Tax Administration (TIGTA) at 800-366-4484 or at www.tigta.gov to report the call.
Phishing occurs when a scammer sends a “realistic” email to get you to link to a phony IRS website and have you enter personal information. Some emails might include attachments with embedded toxic codes that can infect your computer with malware. The subject lines might read as “IRS Taxpayer Notice” or “IRS Important Notice,” and the body of the email may include official looking IRS logos.
As with phone scams, you can fight off a phishing attack by knowing that the IRS never communicates with taxpayers by email, text or social media. They only use regular mail. If you receive a suspicious email, do not open any links and report it at email@example.com.