As Tax Season Approaches, Watch Out for These IRS Scams
Fraudsters are targeting consumers and professional tax preparers alike
The phone rings and at the other end is a person claiming to be an IRS agent. After giving you his name and badge number, he says you owe back taxes. If you don't pay immediately, he warns, you may be arrested (or deported).
Scary as this sounds, it's actually a scam, one that's become so widespread it landed at the top of the IRS list of “Dirty Dozen” tax scams of 2015.
Related: 7 Tips for Filing Your Taxes Safely
In 2015, the IRS says it received 9,000 to 12,000 reports of such calls each week, with more than 3,000 victims scammed of a total of $15.5 million, according to testimony before the Senate Finance Committee.
The trend shows no sign of abating. In December 2015, Ohio Attorney General Mike DeWine reported a spike in fraudulent calls to residents of his state. “Many people hear the word ‘IRS’ and are scared to death,” DeWine said in a press release. “If you get one of these calls, hang up and take a moment to think about it. The real IRS isn’t going to call you demanding immediate payment.”
As tax season approaches, IRS scams are in overdrive. Besides phone calls, the IRS has warned consumers to beware of fake charities, as well as tax preparers promising inflated refunds or deceptive ways to hide income.
Tax professionals are being targeted by scammers as well, prompting the IRS to advise them to not open or click through bogus emails (purportedly from an IRS e-services provider) instructing them to update their IRS portal information and Electronic Filing Identification Numbers. These “phishing” emails contain links that seek to capture usernames and passwords. Armed with such information, scammers can commit crimes like identity theft and diverting income tax refunds to themselves.
How to spot a scam
First thing to know: The IRS does not reach out to taxpayers by email, text message or social media to seek personal financial information. Do not respond if you're contacted in this way.
Also be aware of robocalls or “live” calls seeking PIN numbers, passwords, credit card numbers, bank account numbers or other financial information. If you get a call from someone claiming to work for the IRS and you aren't sure it's legitimate, don't offer any information. Instead, write down the caller's name, badge number, call back number and caller ID if available. Then call 800-366-4484 to find out if the caller is an IRS employee with a legitimate need to contact you.
If not, report the incident to the Treasury Inspector General for Tax Administration using the Treasury’s online reporting form. To alert the IRS, you can email the agency at email@example.com. Put “IRS Phone Scam” in the subject line.
Also note the IRS will never request any of the following over the phone:
- Demand you pay taxes without giving you a chance to question or appeal the amount they say you owe.
- Require you to use a specific payment method for your taxes, such as a prepaid debit card.
- Ask for credit or debit card numbers.
- Threaten to have you arrested for nonpayment of taxes.
Joe Ridout, consumer services manager for the San Francisco-based nonprofit Consumer Action, says if you ever get such a call, do not talk to the person on the other end to try to get information on the scam. Instead, hang up. Talking to the caller puts you at risk of ending up on a “suckers list” as someone who engages with scammers.
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