IRS Scams Every Citizen Should Avoid
Updated June 2023
As if the tax season wasn’t already overwhelming enough, this is also the time of year when scammers prey upon unaware victims in an attempt to steal information about their personal data and financial accounts.
IRS scams are a serious matter, as these schemers use strategic fear-inducing tactics that trick taxpayers into revealing their personal information or submitting a payment. While this is scary, there are red flags to look out for and steps you can take to recognize IRS scam attempts and avoid harm.
TABLE OF CONTENTS
Key Takeaways:
- The IRS conducts its correspondence through the mail, so any unsolicited phone calls or emails claiming to be from the IRS is likely a scam.
- A few examples of IRS scams to avoid include phone scams, phishing emails, fake IRS text messages, fake IRS websites, identity theft, social media scams, ghost tax return preparers, fake tax debt settlement companies, fraudulent charity requests, and fake unemployment claims.
- To avoid falling for an IRS scam, taxpayers should never provide their personal information over the phone or email, regularly check their bank accounts and tax reports, and read all IRS letters sent through the mail carefully to stay on top of accurate tax information.
- Taxpayers should report IRS scam attempts by forwarding emails from an IRS impersonator to phishing@irs.gov, reporting phone scams on the Social Security Administration website, reporting state tax authority impersonators to their local state attorney general’s office, calling or using the online portal for the Treasury Inspector General for Tax Administration (TIGTA), or reporting fraud and scams to the Federal Trade Commission (FTC).
IRS Scams To Avoid
There are multiple different ways scammers can attempt to gain access to a taxpayer’s personal information or potentially monetary assets, such as through IRS impersonation, phishing, and identity theft.
Here are some of the common IRS scams to be aware of so you can avoid falling victim.
Fake Phone Calls
One of the most common types of tax scams involves a scammer calling taxpayers while impersonating an IRS representative, such as mentioning there is an issue with their tax account or that they owe money to the IRS and must pay immediately. With the additional scheme tactic of making the phone number appear to be associated with the IRS or a local office, unaware parties can be more vulnerable to falling for these scams.
It is important to remember that the IRS conducts its primary communication through the mail and not by making unsolicited phone calls, so if you receive a phone call from someone claiming to be associated with the IRS, hang up, and call the IRS on their official number at 1-800-829-1040 to validate the call.
Phishing Emails
Email phishing is another scamming tactic in the tax realm that puts individuals at risk of having their accounts compromised. Within these emails that appear to be from the IRS, there may be malicious links that cause malware to be downloaded onto their computers when clicked.
Again, the IRS contacts people with important information by sending notices through the mail, and not through email, so never click on a link, file, or attachment sent by unfamiliar email addresses.
Fake IRS Text Messages
Similar to email or phone phishing scams, IRS scams can occur through regular text messages as well, by texting the taxpayer and claiming to be the IRS. Within these phishing messages, there are often links that can expose their phone or computer to malware and potentially steal their information, so it is important to remember that the IRS will never communicate with taxpayers via text message.
Fake IRS Website
Some scammers utilize the strategy of developing fraudulent websites that look similar to the real IRS website to trick taxpayers into supplying their personal information, such as their name, birthday, social security number, or potentially, payment information.
Taxpayers should always verify that they are using the official IRS website before entering any sensitive information.
Identity Theft
Tax-related identity theft is another crime that taxpayers must be made aware of. During this situation, an identity thief may file a tax return using the taxpayer’s name and social security number so that they can accept the tax refund. One of the dangerous consequences of tax-related identity theft is that taxpayers are often unaware that their identity has been stolen until they go to file their tax return.
It is essential to never give away your personal identification information, especially your taxpayer identification number such as a social security number, to an untrusted party.
Social Media Scams
Taxpayers can become targets of tax scam attempts in a situation where criminals utilize information found on their social media to access further details about their personal data. This could include the impersonation of someone’s family member or friend where they send direct messages through social media asking for money or information.
Ghost Tax Preparer
Another scam strategy that criminals use to extract personal information from taxpayers is to pose as a tax preparer, often claiming to save the taxpayer money or earn them a large tax refund, but instead, charging a sizeable preparation fee and stealing the money.
When in communication with someone in this fake role, the victim may reveal all of their tax and financial information, but at the end of the process, the “tax preparer” will not provide a signature or a preparer tax identification number (PTIN), which are both required by law when filing taxes using tax preparation services.
Fake Tax Debt Settlement Business
Some tax schemes can also occur within dishonest tax debt settlement companies that charge a large fee for helping struggling taxpayers resolve their tax debt. Taxpayers who have had trouble paying their taxes in the past or are stressed about their unpaid taxes are more likely to fall victim to these schemes as they are more desperate to resolve their tax issues.
The companies that utilize this tax scam approach are sometimes called “offer in compromise mills,” as they claim that the taxpayer’s debt can be settled at a large discount, but taxpayers must pay a significant fee to utilize these services. It is safer to communicate with the IRS directly to seek out tax settlement options or to hire the help of a reputable tax debt relief company that can provide guidance about the appropriate tax resolution options.
Fraudulent Charity Requests
Fraudsters may target consumers for IRS scams by setting up a false organization claiming to be a charity and requesting donations. They may request victims to submit a payment online or provide financial information over the phone, which can lead to them unintentionally experiencing a personal data breach.
If a company claiming to be a charity asks for donations, they will have an employer identification number (EIN) to verify the validity of the organization, so if this information cannot be provided, it must be a scam.
Fake Unemployment Claims
In the case that identity thieves get hold of a taxpayer’s personal information, they may use that data to try to claim unemployment benefits. If this happens, the taxpayer may be unaware that their information was stolen until the IRS sends them a Form 1099-G during the tax season for the reporting of unemployment compensation.
IRS Scammer "Red Flag" Phrases
There are several red flags that arise during a tax scam that can save taxpayers a tremendous amount of trouble if they know how to look out for them.
Here are some phrases that raise red flags about the scammer’s credibility:
- “We can help you create an account with the IRS.”
- “After recalculating your tax refund, we need you to fill out this tax form.”
- “We can help you file a casualty loss claim.”
- “This is a representative from the Federal Depository Insurance Corporation (FDIC) and we need your bank account information.”
- “Click here to review details related to your federal tax refund.”
- “Click here to review your official tax transcript.”
There are many other ways that IRS impersonators can target victims for IRS scams and appear more legitimate, such as falsifying their caller ID and using fear-mongering. However, if you remember that the IRS will address all important tax information through mail correspondence and never by calling taxpayers directly, it is easier to recognize signs of scamming attempts and avoid becoming a victim.
How To Safely Review Tax Information
If you have received questionable communication from someone claiming to be associated with the IRS, U.S. treasury, United States government, or another type of tax collection agency, there are safe ways you can verify information that does not involve clicking on suspicious links or revealing sensitive information.
Use The Official IRS Website
Utilizing the official IRS website as your primary source of information is the best way to ensure the protection of your information. The website includes a variety of resources to help taxpayers understand tax matters as well as offering a portal to check their tax bill, return status, and make secure payments using a tax payment system.
Contact The IRS Directly
Contacting the IRS directly by using one of the phone numbers found on the IRS website or corresponding through mail can ensure you are receiving valid information and are not at risk of exposing yourself to an IRS scam.
Refer To Your IRS Letters
The IRS will send you a letter in the mail any time there are announcements, updates, or circumstances requiring action related to your taxes, including information about how to contact the IRS and how to proceed.
Tips To Avoid IRS Scams
Never Provide Personal Information Over The Telephone Or Email
The most important thing to remember regarding the security of your personal, financial, or tax-related information is that the IRS conducts all important correspondence through the mail, so they will never call or email taxpayers demanding more money or informing them of an issue. Unless you are able to verify the authenticity of the request, it is safer to contact the IRS directly using the IRS contact information you can verify is correct.
Regularly Review Financial And Tax Accounts
Reviewing all of your financial statements regularly, including your bank accounts, credit cards, and tax record, will help you ensure that there is no fraudulent activity present, or, in the case that there is unusual activity, you catch it sooner rather than later. By staying on top of your finances, you can feel more confident that your sensitive personal information is still secure and that you have not fallen victim to a tax scam.
Read All IRS Letters Received In The Mail Carefully
Staying up to date with all of your IRS mail is another strategy that helps you ensure that there are no tax-related issues on your account, or, if there are, you can learn the appropriate steps to resolve that problem without risking you losing your personal information or money in a tax scam. Mail correspondence is the preferred communication method for the IRS, so anyone claiming to be from the IRS who contacts you over the phone or through email should be ignored and reported.
Report Scam Attempts To Prevent Future Fraudulence
If you are targeted for an attempted tax scam, it is important that you report any scam attempts to hopefully prevent the same thing from happening to someone else.
How To Report IRS Tax Scams
There are several ways you can report IRS scammers:
- Forwarding emails from IRS impersonators to phishing@irs.gov
- Reporting phone imposter scams on the Social Security Administration’s website
- Reporting state tax authority impersonators to the state attorney general’s office
- Using the online portal or calling the Treasury Inspector General for Tax Administration (TIGTA)
- Report fraud and scams to the Federal Trade Commission (FTC)
Suppose you are the victim of an IRS tax scam or are wondering how to navigate your tax situation safely. In that case, it can be beneficial to hire tax professionals to ensure your personal and financial information is protected and that your taxes are up to date. If you have questions about how tax experts can help, schedule a free consultation with Ideal Tax for advice about anything regarding your taxes.
