Tiffany M. Faust | Posted on Feb 01, 2018
Tax season is a critical time to become better acquainted with the latest tax-related scams that have impacted thousands of individuals in recent years. Below are two ways tax scammers might target you and what you can do about it.
Tax Identity Theft
Tax Identity Theft occurs when someone files a phony tax return using your Social Security Number (SSN) in order to receive the tax refund from the Internal Revenue Service (IRS). This type of theft can also happen when someone uses your SSN to get a job, or when someone claims your child as a dependent on his or her tax return. In these situations, you may receive a letter from the IRS indicating:
- more than one tax return was filed in your name, or
- IRS records show wages from an employer unknown to you.
If you receive a letter from the IRS as described above, contact the IRS Identity Protection Specialized Unit immediately at 800.908.4490. Learn more about Tax Identity Theft atftc.gov/taxidtheft and irs.gov/identitytheft.
IRS Imposter Scams
In an IRS Imposter Scam, the scammers are not pretending to be you - they are posing as officials of the IRS. In this case, an individual may call you to say you owe taxes, and he or she may threaten to arrest you or revoke your license if you fail to pay the taxes immediately. The individual contacting you may know all or part of your Social Security Number, and may also manipulate Caller ID to make it look like the call is coming from Washington, D.C. when it may actually originate from anywhere in the world. Additionally, the scammer may tell you to put the money owed on a prepaid debit card - something a legitimate government agency would never ask you to do.
In that regard, the real IRS will never ask you to pay taxes with a prepaid debit card or by wire transfer, and will never ask for a credit card number over the phone. When the IRS contacts individuals about unpaid taxes, they always communicate by mail and never by email, text, or social media.
If you are a victim of an IRS Imposter Scam, take action immediately by reporting it to the Treasury Inspector General for Tax Administration at 800.366.4484 and to the Federal Trade Commission (FTC) at ftc.gov/complaint.
It is important to become more knowledgeable about these scams to protect yourself and your family. For additional information, visit IdentityTheft.gov, the federal government's one-stop resource for reporting and recovering from identity theft. You may file a report on this website, as well as obtain step-by-step advice, sample letters, and an FTC Identity Theft Affidavit.
If you become a victim of any form of identity theft, you should also contact your financial institution to protect your accounts and for any further assistance.