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The IRS has warned the public to be on the alert for tax scams. IRS scams are most common around the tax filing season. But they can occur at any time of the year.
The IRS has recently released it’s “Dirty Dozen” tax scams 2019 list. Included on the list are identify fraud, phishing scams, and return preparer fraud. The Federal Trade Commission (FTC) has also issued an IRS Scam alert.
What Are the Common Types of IRS and Tax Scams to Watch Out For?
So, what do IRS phone scams sound like? What you should you be on the lookout for? Here’s a rundown of the most common IRS scams that scammers try to pull.
1. Surprise Tax Bill Scam
This is a common telephone IRS scam. Scammers telephone people to tell them that they have an outstanding tax bill that must be paid now.
Often, the scammers will spoof the telephone number. So, it will look the call is coming from the IRS.
The scammers will tell that you will be arrested if you don’t pay the bill. They may follow up the threats with convincing looking emails. They could already have part or all your social security number. The scammers will use information like that to make the scam seem more convincing.
The scammers will tell you to make payment by prepaid debit card or by wire transfer.
The IRS will never contact you by phone to demand money. They always contact you by mail first.
The IRS would never insist that you pay by prepaid edit card or wire transfer. That’s the scammers way of covering their tracks.
2. Tax Refund Scam
The news of an unexpected tax refund is bound to get people excited. That’s what the scammers are banking on. The excitement of knowing that you are about to receive a windfall makes people throw caution to the wind.
What the scammer wants you to do is divulge your bank account details and your social security number. They will tell that that they need that information to can process your refund.
This IRS scam may come in an email. Or it may come at you as a telephone call. The IRS will not contact you like this about a tax refund. They will contact you by mail.
3. Return Preparer Fraud
Most tax preparers do a good job and are honest. Some tax preparers are not.
There are some people who say they are preparers, but they do not have a Tax Identification Number, and they don’t know what they are doing.
There are also people who want to steal your personal information.
For more information on to how to choose a trustworthy tax preparer, check out this post on NerdWallet.
4. Filing False Tax Returns
This one is a two-phase IRS scam. First, the scammer will get hold of your personal information and your social security number. Then, they will file a false tax return in your name.
The tax return they file in your name will show a low income and lots of deductions to get a tax refund. The tax refund will go to the scammer, not to you.
When you come to file your real tax return, the IRS will reject it. It’s then that you will find out the false return has already been filed.
What Does an IRS Scam Telephone Call Sound Like?
IRS scam calls are often robocalls. The call may tell you that you owe the IRS money. It is also likely to tell you that if you don’t pay you will go to jail or get deported. Scammers often target people from minority communities. The phone calls may be in the persons native language rather than English.
Here’s a video by the FTC about IRS scam telephone calls:
What You Should Do If You Receive an IRS Scam Phone Call?
The important thing to remember is that the IRS will not call you out of the blue to ask for money or information. You will always have received a written request first. The IRS will also never insist that you pay money by a wire transfer or a prepaid credit card.
If you receive a call, a text, or an email from a person claiming to be from the IRS, here’s what you should do:
1. Hang Up
If you receive a suspicious IRS call, hang up. If get an email or text, don’t reply. Contact the IRS directly on the official IRS telephone number.
2. Don’t Send Money
Don’t send any money to a person claiming to be the IRS without checking directly with the IRS first.
The IRS will never insist on any special payment method. They wouldn’t insist that you pay by wire transfer of gift card, for example.
3. Report It
Report the scam straight away to the IRS or the FTC.
4. Tell Everyone You Know About It
Tell friends, family and people in your community about the scam. If people know about IRS imposters, they will be more careful about who they give information or money to.
We hope that by keeping our readers up to date with the latest scam alerts, we can help prevent you becoming a victim. Please do share this post on your social media so that other people can avoid IRS scams too.
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