Taxpayer scammers start their scheming long before tax season—right around the tax-filing extension deadline on October 15th is when many tax predators begin preying on consumers, according to a recent Consumer Tax Alerts from the the Internal Revenue Service (IRS).
Thousands of taxpayers have lost millions of dollars as a result of these scams across the country. The IRS says it stopped 787,000 confirmed identity theft returns, amounting to $4 billion in potential losses for consumers, in 2016.
Despite the efforts of the IRS, many consumers continue to fall victim to scammer tax traps. Criminals use phone calls, e-mails, social media and even postal mail to deceive businesses, individuals, tax professionals and even payroll specialists, according to a report from the IRS.
As a result, the IRS has issued a list of consumer warnings based on the most common tax scams. The IRS also reminds consumers that it will never contact taxpayers via e-mail, text message or social media channels to request personal or financial information. Anyone who has received communication through these avenues is likely being scammed, according to the IRS.
These, according to the IRS, are the most common consumer tax scams:
October 15th Deadline Scams
Tax scams become especially prevalent near the IRS extended-filing deadline on October 15th. Scammers pose as IRS workers and make harassing phone calls and use e-mail phishing schemes to coerce taxpayers into making payments in time for the deadline.
Natural Disaster Scams
In 2017, the U.S. experienced seven natural disasters that required at least a billion-dollar in recovery funds per event, according to a report from the National Centers For Environmental Information. The IRS warns taxpayers to avoid donating to charities they have not properly vetted. Fake charitable organizations can surface, online, in person and over the phone. Taxpayers looking to donate to disaster victims can verify the legitimacy of charitable organizations at the IRS's Tax Exempt Organization search tool.
Impersonation Scams
Scammers get phone numbers that show up as the IRS Taxpayer Assistance Center (TAC) on victims' caller ID. The callers trick victims into paying non-existent overdue tax-bills. TAC employees will never initiate contact with taxpayers for payment, the IRS warns. The IRS will always contact taxpayers via postal mail to resolve a tax issue before calling. If a consumer does owe taxes, they can visit IRS.gov/payments to make secure payments, according to the report.
Telephone Scams
Most recently, telephone scams have targeted immigrants. Scam artists call with fake badge numbers and names and demand payment from victims who in most cases have limited English proficiency. They threaten deportation, suspension of business or driver’s licenses and often demand victims pay using gift cards or wire transfers. The IRS will never threaten to involve local police and other law-enforcement for not paying, according to the report.
Scams Targeting Tax Professionals
Tax fraudsters are aggressively targeting tax professionals to retrieve their client’s personal data to file fake federal and state returns. These individuals are often sophisticated, organized and very convincing. Client data should never be shared with outside professionals, says the IRS, which recommends that professionals read its online guide for proper security practices.
Professional Tax Association Scams
The IRS warns tax practitioners of phishing e-mails that appear to be from state accounting and professional associations. The e-mails will attempt to retrieve the professional’s e-mail usernames and passwords to get access to personal client data. As a result, the IRS has laid out a guide on how to protect taxpayer data.
Payroll and Human Resources Scams
Identity thieves will request the W2 forms of employees from the payroll and human resources offices of employers. The IRS urges employers to set up procedures to protect their employee’s information. Businesses who believe their employee’s data has been breached are urged to report the incident to the IRS at [email protected], including “W2 Data Loss” in the subject line, and to the FBI.
E-mail Phishing And Malware Scams
Scammers send fraudulent e-mails to victims, tricking them into disclosing personal information. These messages are masked as communication from the IRS, tax professionals and even tax software companies. They lure people in by pretending to be their tax professional and mentioning tax refunds. The messages ask victims to confirm things like the taxpayer’s filing status and other personal information.
Tax Advocacy Panel
Some victims have received e-mails that appear to be from the Taxpayer Advocacy Panel (TAP) asking for financial information. TAP is a volunteer board that advises the IRS about issues effecting taxpayers. The board advocates for taxpayers and does not have access to their tax information and will never make these kinds of requests, according the IRS.
