Nearly half of Americans file their taxes using online software. While this is faster and more convenient, it also makes consumers more vulnerable to tax scams. As tax season approaches, scammers will be working overtime to get ahold of personal information. Here are four common scams to watch for this tax season and how to report them.
Fraudulent returns
Filled with a substantial amount of personal information, a tax form is the last thing you want to get stolen. Once a fraudster has their hands on your social security number, date of birth, and gross income the scammers can file false federal and state income tax returns. If the scammer can get ahold of your information fast enough and file before you, they have the opportunity to steal a sizeable refund.
Phone scams
One scam targeting taxpayers all over the county is a complex phone scam where callers claim to be an employee of the IRS. Fake names, bogus badge numbers, and even altering the caller ID are some of the lengths these scammers are going to. They can be very convincing and may even do a little research about their victim beforehand to be more believable. Victims are informed that they owe money to the IRS and that it has to be paid immediately via wire transfer or preloaded debit card. If you get a hostile and threatening call from someone claiming to be the IRS it is best to just hang up the phone.
Phishing
In the 2016 tax season the IRS saw a 400% surge in phishing and malware incidents. Scam artists will use emails to trick taxpayers into thinking that they’re official forms of communication from the IRS. Within these emails are a variety of questions asking anything from filing status to pin information. There are also links to sites that mimic official tax sites but contain malware that can then infect your computer and track personal information without you knowing it. The IRS does not initiate communication with tax payers via email, so if you find a message in your inbox claiming to be the IRS it is important that you simply delete it.
How to report scams
If you find yourself a victim of a tax scam it is important that you act fast! The first step is to contact the IRS identity protection specialized unit and report the theft. Next, you will fill out the Identity theft affidavit form 14039. Informing the three major credit reporting agencies and your financial institutions right away is also very important and can stop the thieves from opening new accounts in your name.
What to remember
The IRS will NEVER call you demanding immediate payment, threaten you with police involvement, or ask for your credit or debit card number over the phone. Scammers are smart criminals and are always changing their tactics. Stay safe this tax season, remember to stay calm in these situations and to never give out any personal information to someone you do not know.
For more information on tax fraud, check out the following articles:
http://money.usnews.com/money/blogs/my-money/articles/2016-03-17/6-scams-and-frauds-to-avoid-this-tax-season
http://www.nbcnews.com/business/taxes/wave-fake-federal-state-tax-returns-filed-experts-say-n302781
https://www.irs.gov/uac/tax-scams-consumer-alerts