The IRS continues to report a rise in scams as imposters prod taxpayers to reveal personal identifiable information and make hasty payments to avoid prison time.
For a lot of people, hearing from the IRS causes panic. But before you hand over your Social Security Number or get ready to make a payment, you should take a closer look at how—and why—you are being contacted.
Signs of fraudulent calls
Most often, the IRS will send a paper notice to a taxpayer they believe owes tax or is owed a refund, although it’s possible they may call in the case of an audit or to verify information. The IRS will not:
- Threaten law enforcement action if the taxpayer does not pay.
- Call for immediate payment, especially using specific payment methods such as prepaid debit cards, gift cards, or wire transfer.
- Demand taxes be paid without an opportunity to question or appeal what they say is owed.
- Ask for paper checks to third parties. (All federal tax payments should only be made payable to the U.S. Treasury. For state payments, refer to your specific state’s revenue department.)
Although there are authorized private collection agencies that work alongside the IRS, they, too, follow the same standards.
Because technology exists that allows scammers to spoof the phone number they’re calling from (allowing them to pose as the IRS or a state department), if you have any suspicions, you may want to hang up and call the number directly. Then, you can confirm with an agent if they were indeed trying to contact you.
Additionally, if you receive a call from and think it’s possible you could owe tax, you can always view your tax account information online to confirm the amount owed.
Signs of phishing scams
Phishing scams are on the rise, with emails coming to taxpayers that often offer financial assistance or ask for verification of your personal information. Scammers will use email and text messages to try to gain access to taxpayers’ information—and because they can look legitimate, they are often successful. Scammers also update their tactics by staying keyed into current events and following trends, making some scams hard to spot because of how legitimate they seem.
So, even though it may look like you’ve received an email from the government, it’s likely you haven’t. It’s important to note the IRS will only contact you via email with your permission, and they will never contact you on social media. Common tactics to get your attention include:
- Notification of suspicious activity or too many log-in attempts
- Requests for confirmation of personal information
- Attachments of fake invoices or bills
- Inclusion of links to make a payment
- Promise of a big payday or debt relief
Because the IRS will not initiate with a taxpayer via email, you should be on alert if you do receive an email from someone claiming to work for the IRS. Do not click on any links or open any attachments. Instead, report the email to the IRS and forward it to phishing@irs.gov.
For any emails coming from the department of revenue for your state, you can usually verify authenticity by checking online or calling the department back directly for information.
Stay ahead of taxpayer scams
During tax season, scammers targeting taxpayers double down their efforts as they see opportunity. In order to keep your information secure, you can:
- File early to prevent others from using your SSN.
- Pay any tax payments early and electronically instead of by mail.
- Create strong passwords and use a password manager to help keep track of those passwords.
Additionally, taxpayers may want to use an Identity Protection (IP) PIN while filing to confirm your identity. An IP PIN is a six-digit number that helps protect you from tax-related identity theft by ensuring that only you can file a tax return using your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
Even if you don't have a filing requirement that mandates and IP PIN (such as being a former victim of identity theft), you can still use one to protect your account from unauthorized use. The fastest way to receive an IP PIN is through your IRS Online Account. If you don’t have an account yet, you will need to register to validate your identity.
Please keep in mind after you opt-in and obtain your IP PIN online, you will need to retrieve it each calendar year. You’ll also need to inform your tax preparer, as it is needed for e-filing once requested.
What to do if you fall for a tax scam
If you discover unauthorized transactions, receive notices of a duplicate tax return, or have your tax return rejected, that may signal your identity has recently been compromised.
Despite your best efforts, criminals are becoming sophisticated enough that anyone can fall for a well-laid scheme.
If you think you or someone you know has given up too much information to someone who may be trying to scam you, the earlier you act, the more likely you are to lessen damages. You should immediately contact the IRS or state department you were talking to in order to confirm if it was who you were talking to. Then, talk to your trusted tax advisor for what steps to take.