Every tax season, the IRS issues warnings about common scams and fraud schemes. Thousands of people have lost millions of dollars and their personal information to tax scams, so what should you be on the lookout for? Scammers use snail mail, phone calls, and email to prey on people and businesses. As you read on, remember:The IRS does not initiate contact with taxpayers by email, text, or social media to request personal or financial information.
Fake IRS Phone Calls
A sophisticated phone scam targeting taxpayers, including recent immigrants, is a common scam every year. Callers claim to be IRS employees and may or may not know a lot about their targets, threatening victims with arrest, legal action such as deportation, or penalties for crimes like unpaid taxes. This isn't true, but it certainly feels real enough. Even more confusing, fraudsters use caller ID spoofing to make themselves look more legitimate. To protect yourself, remember and share these tips:
- The IRS will typically send a letter before making a phone call.
- The IRS will never demand payment over the phone or threaten you. They are not interested in gift cards or an immediate wire transfer.
- Hang up if you think it might be a scam, and call the IRS directly to verify anything a potential fraudster may have said. There is always time (a day or two at the very least) to verify any claims that you owe the IRS money and file an appeal if needed.
Tax Preparer Scams and Ghost Preparers
Most tax professionals are legitimate, but there are some who take advantage of their clients and the information they have access to. These deceitful tax preparers might overcharge for their services, say you'll get a much higher refund or deduction than is reasonable, or even file false returns using your information. To help you avoid this scam:
- Research your tax preparer and verify their credentials before having them process your return.
- Be cautious of any preparer that guarantees you'll get a specific refund amount.
- Double-check all the information entered on your tax return before it's filed.
- Make sure your preparer signs your tax return, as required by law. If they don't, they are probably trying to take advantage of you and will leave you with the consequences of any inaccuracies or fraud on your return.
Phishing Emails and Websites
Phishing (as in “fishing for information”) is one of the most common scams. Fraudsters send emails that look like they're from the IRS, tax professionals, or tax software companies to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victim's identity. These emails often ask for sensitive information or have links that lead you to fake websites that look like the legitimate version. To protect yourself, follow these tips:
- Always verify the sender's email address and look closely to make sure it's legitimate. At first glance, rn (r and n) might look like an m, for example.
- Do not click on suspicious links or download any attachments from unknown sources. Even if it might be from a known source, it always helps to double-check first!
- Confirm any requests for your information by contacting the IRS or tax professional directly.
If you do get a fraudulent email claiming to be from the IRS or from a related component such as EFTPS, report it to the IRS at phishing@irs.gov. For more information, visit the IRS's Report Phishing page.
Tax-Related Identity Theft
This is when your Social Security number is used to file a bogus tax return and claim the refund from the bogus return. You may only find out your information was stolen once you try to file your legit tax return and it gets rejected. While very frustrating, there are some steps to take if this does happen to you. Check out our blog, What to Do if Someone Files Taxes Using Your Social Security Number, for more information. To help prevent this from happening in the first place:
- File your tax return as soon as possible to give fraudsters less opportunity to file a fraudulent one first.
- Place a fraud alert or a credit freeze with each of the three major credit bureaus:
- Equifax, www.Equifax.com, 800-766-0008
- Experian, www.Experian.com, 888-397-3742
- TransUnion, www.TransUnion.com, 800-680-7289
WaFd Bank is Here to Help
With products and services to make banking easy, WaFd Bank is also here to answer all your questions, both big and small, about money, scams, and more. We also offer checking accounts that come with rewards to help you save money and stay on top of your finances. To learn more, take a look at our checking account options, stop by your local branch, or give us a call at 800-324-9375.
