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What You Need to Know About Staying Safe from Tax Scams

Tax scams can happen any day of the year, but are especially prevalent during tax season. Criminals can attempt to steal your money or personal information in a variety of ways including over the phone, through email, and with text messages. Read the following tips to find out how to stay safe from tax scammers.


How can I tell if I am getting scammed?

Scammers often use many of the same tactics in their attempts to steal from people. Being aware of these common tactics can help you determine if you’re dealing with a scammer. Common scamming techniques include the following:


Asking for information through email, text message, or social media

One of the first things you should remember is that the IRS will never ask for information via email, text, or social media. Keeping this in mind will eliminate the possibility of falling victim to a scam. If you receive an online message asking for information from somebody saying they are the IRS, assume it came from a scammer

and ignore their request. If given the option to block or report the scammer, do so.


Demanding Immediate Payment

When it comes to tax scammers, a big red flag will be if they demand that you make a payment immediately. The IRS will never call you demanding immediate payment without first sending you a notice in the mail. The IRS would also allow you to question or appeal the payment prior to making it.


Requiring Payments a Certain Way

Another sign that you may be dealing with a scammer is if you’re asked to make a payment a specific way. Many scammers will ask you to make payments only with a prepaid debit card or by wiring the money. The IRS will never force you to pay a certain

way and will allow you to decide which method of payment works best for you.


Asking for credit or debit card numbers over the phone

The IRS will never ask you to provide credit or debit card information over the phone. If you’re being asked to provide credit or debit card numbers over the phone to make a tax payment, you are likely dealing with a scammer.


Threatening to bring in police to arrest you for not paying

If you refuse to make a tax payment and are threatened with arrest, then you are dealing with a tax scammer. The IRS will not make threats of arrest for not making a payment. Don’t allow these threats to scare you into making the mistake of providing personal information to a scammer.


What are the most common scams?


Identity Theft

Identity theft occurs when someone uses your personal information, such as your name, Social Security number (SSN), or other identifying information, without your permission, to commit fraud or other crimes. In many cases, an identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund.


Pervasive Telephone Scams

The IRS has seen a recent increase in local phone scams across the country, with callers pretending to be from the IRS in hopes of stealing money or identities from victims. These phone scams include many variations, ranging from instances where callers say the victims owe money or are entitled to a huge refund. Some calls can threaten arrest and threaten a driver’s license revocation. Sometimes these calls are paired with follow-up calls from people saying they are from the local police department or the state motor vehicle department.


Phishing

Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.


False Promises of “Free Money” from Inflated Refunds

Scam artists routinely pose as tax preparers during tax time, luring victims in by promising large federal tax refunds or refunds that people never dreamed they were due in the first place. While honest tax preparers provide their customers a copy of the tax return they’ve prepared, victims of scams frequently are not given a copy of what was filed.


Taxpayers should take care when choosing an individual or firm to prepare their taxes. Honest return preparers generally: ask for proof of income and eligibility for credits and deductions, sign returns as the preparer, enter their IRS Preparer Tax Identification Number (PTIN), and provide the taxpayer a copy of the return.


What should I do if somebody is attempting to scam me?


Over the phone

If you get a phone call from someone claiming to be the IRS and you think you might owe taxes, call the IRS at (800) 829-1040. This way you know you are talking with somebody from the IRS and they will be able to help with the payment issue.


If you know you don’t owe payments, or have no reason to believe you do, report the incident to the Treasury Inspector General for Tax Administration at (800) 366-4484 or at http://www.tigta.gov. Also, you can contact the Federal Trade Commission and use the FTC Complaint Assistant at FTC.gov if you believe you have been specifically targeted by a scammer.


Email

If you receive an email from somebody claiming to be the IRS, and they are requesting personal or financial information, you should not reply. Also, make sure not to open any of the attachments or click on any of the links. Next, forward the email to the IRS at phishing@irs.gov. Finally, mark the original email as spam and delete it.


Text Message

If you receive a text message from somebody claiming to be the IRS, you should treat it like you would an email. Do not reply or click on any of the links. Forward the text to the IRS at 202-552-1226, and if possible, include the number in a separate message. Finally, make sure you delete the original text and block the number if you can.


Website

If you come across a website that claims to be the IRS that you believe is a scam, you can email the URL to phishing@irs.gov. When you send the email, make sure to include “suspicious website” in the subject line.


How can I further protect my private information?


Online

Even if a scammer isn’t attempting to communicate with you directly, it’s still possible for your personal and financial information to be compromised. In order to further protect your private information, make sure you keep your computer protected and are smart online.


One thing you can do is take advantage of security software that updates automatically. This includes a firewall, virus protection, and file encryption for important data. Also, don’t give out any personal information unless it is through trusted websites. Treat your information like cash and don’t be careless with it. This includes posting about past addresses, a new home, a new car, and other life events on social media. Finally, make sure you’re using strong, random passwords that you keep to yourself.


Offline

There are simple things you can do offline to make sure your personal information stays safe. One thing you can do is avoid carrying around your Social Security card, or other documents that have your Social Security number included. Also, keep old tax records safely protected at your home in a safe that is under lock and key. These are records that you don’t want lying around for people to easily look at. Finally, if there are tax records that you don’t plan on keeping, make sure you shred the documents before you throw them in the trash.


What should I do if I believe I have been scammed?

If you believe you have fallen victim to a tax scam, follow these steps to limit the effect of the theft:


First, you should determine what information the thieves compromised. This includes emails, passwords, and more personal information like your Social Security number.


Next, you should place a freeze on your credit or debit card accounts. This will allow you to stop the scammers from taking any more money or records from your account. You should also place a fraud alert on your account which forces a business to verify your identity before issuing credit.


Finally, reset your passwords on any online accounts. This includes email, social media, and financial sites. You should try to keep a different password for each of your accounts to make it more difficult for the scammer to access your information. If possible, take advantage of multi-factor authentication which requires a security code to log in to your account that is usually sent to your phone number.


Having the right knowledge and knowing what to look out for will help protect your business and personal finances from scammers, keeping you safe throughout the year.



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