Tax scammers might target you: here’s what to do
Tax season is stressful, and the prospect of getting contacted by the IRS can be intimidating. Unfortunately, scammers often take advantage of these anxieties to trick innocent people into giving them money or sensitive information.
Tax scams are all too common, and with today’s technology they now come in a variety of forms. Once you know what to look out for, however, you can easily spot and avoid most scams.
Below are some of the most common ways tax scammers might target you this tax season —and what you can do about it.
Fake tax return
Tax identity theft occurs when someone steals private information such as your Social Security number (SSN) and uses it to file a tax return in your name. It can also happen when someone uses your SSN to get a job. The result is that you end up getting scammed out of your legitimate tax refund — or owing taxes on income you didn’t earn.
Here’s how to tell if you’ve been the victim of tax identity fraud:
- The IRS rejects your tax return, saying a return connected to your SSN has already been filed.
- The IRS notifies you that an online account at IRS.gov has been created in your name when you haven’t signed up for such an account.
- IRS records show wages from an employer you don’t know.
How to avoid it: Protect yourself against tax identity theft by safeguarding your SSN and other sensitive information. Beware of people who request your personal information by phone or email, even if they appear to be legitimate.
“If you have identified a scam the best thing to do is to delete it and not engage with it,” says OCCU information security analyst, Denny McDowell. “For some, there is an understandable urge to call the scammer out, but you may be inadvertently painting a target on yourself, at the very least by letting them know they have an actively monitored email address or phone number to target.”
What to do if it happens to you: Contact the IRS Identity Protection Specialized Unit at 800.908.4490 to report the theft. Learn more about tax identity fraud from the Federal Trade Commission and the IRS.
Gift card scam
Some scammers may target you with threatening phone calls or voicemails claiming you owe federal taxes and will be charged with criminal activity if you don’t pay immediately. They often appear at first glance to be legitimate; for example, they might know all or part of your SSN, and they can rig caller ID to make it look like the call is coming from Washington, DC.
These thieves will often request payment in the form of a pre-paid debit card or gift card such as iTunes or Google Play. Once you buy the cards and call the scammer back, they’ll ask for the card's number and PIN so they can spend the funds.
“Both of those gift card types are very often used in scams and can be a red flag for our members,” says OCCU information security analyst, Max Majdecki.
How to avoid it: The first thing you need to know is that when the real IRS contacts people about unpaid taxes, they do it by mail — not by phone. They also never request payment via gift card or pre-paid debit card. These are sure signs of a scammer, so just hang up.
What to do if it happens to you: “If you receive a tax-related phone call that feels suspicious, it’s OK to simply hang up,” says OCCU information security analyst, Conlan Knechtel. “If you’re concerned about whether you legitimately owe taxes, you should contact the IRS directly.” You can also report IRS imposter scams to the Treasury Inspector General for Tax Administration and the FTC.
Refund recalculation scam
While some identity thieves take advantage of your fears and anxieties, others choose to take advantage of your hopes instead. For example, some scammers may send you an official-looking email or text claiming that they’ve recalculated your refund and the IRS owes you more money than you thought. All you have to do is click the link and enter your SSN and other personal information.
Once you do, they’ll use your information to access your financial accounts or apply for credit cards and loans in your name.
How to avoid it: Again, the best prevention against this type of scam is simply to know that if the IRS did miscalculate your tax refund, they would contact you by mail — not by email or text message. They also would never ask for your personal information via email or text. If you do receive an email or text that appears to be from the IRS, don’t click on any of the links in it.
What to do if it happens to you: Hit the delete button. If you think there’s a possibility you might actually have a larger refund coming, you can contact the IRS directly.
Need help recovering from identity theft?
IdentityTheft.gov is the federal government’s one-stop resource to help you report and recover from identity theft. You can report identity theft, get step-by-step advice, sample letters, and your FTC Identity Theft Affidavit. These resources will help you fix problems caused by the identity theft.
OCCU is here to help keep your identity — and your money — safe from scammers. Check out our Member Security video playlist on YouTube for updates about the latest scams and how to protect yourself from them.