Don’t Get Duped: How to Recognize and Avoid Tax Scams

Tax season is here, and while most of us are busy gathering W-2s and crunching numbers, scammers are hard at work too. Every year, thousands of people fall victim to tax scams that drain bank accounts, steal identities, and create a whirlwind of stress. Let’s break down the most common tax scams, how they work, and most importantly how to protect yourself.

1. The Fake IRS Call

Ever picked up the phone and heard, “This is the IRS. You owe money, and if you don’t pay immediately, you’ll be arrested”? It’s terrifying, right? But here’s the good news: the IRS doesn’t call people out of the blue, and they certainly don’t threaten jail time over the phone. These calls are designed to scare you into making rash decisions, like paying with a wire transfer or gift cards.

How to protect yourself: Hang up. If you’re unsure, call the IRS directly at their official number (800-829-1040) to check your tax status.

2. The Phishing Email

Tax-related phishing emails have become disturbingly common. These emails might look like they’re from the IRS or a tax preparation service, asking you to “verify your information” or click a link to “resolve an issue.” Spoiler alert: clicking that link can lead to malware or websites that steal your personal information.

How to protect yourself: The IRS will never email you for sensitive information. If you get a suspicious email, don’t click any links. Forward it to [email protected] and delete it immediately.

3. Ghost Tax Preparers

Not all scammers work in the shadows – some set up shop in plain sight. Ghost tax preparers are fraudsters who prepare your tax return but don’t sign it as a paid preparer. They might promise huge refunds to lure you in but use fraudulent tactics to file your return. When the IRS finds the errors, guess who’s on the hook? You.

How to protect yourself: Always work with a reputable, licensed tax preparer. Check their Preparer Tax Identification Number (PTIN) and ask for references.

4. Social Media Refund Scams

Here’s a modern twist: scammers are promoting fake tax refund schemes on social media. They might offer to “help” you claim a refund through non-existent credits or false information. Some even charge a fee for their “service,” leaving you with incorrect filings and no refund.

How to protect yourself: Never share personal tax information with someone you found on social media. If something sounds too good to be true, it probably is.

5. Tax Transcript Scams

Another clever scam involves fake emails claiming to be from the IRS, with subject lines like “Tax Account Transcript” or “Tax Refund Notification.” These emails typically include malicious attachments or links.

How to protect yourself: Remember, the IRS doesn’t email tax transcripts to taxpayers. Access transcripts only through your secure IRS online account.

6. Identity Theft and Tax Returns

Imagine filing your taxes only to discover someone already filed a return under your Social Security number. Scammers use stolen identities to claim refunds before the rightful taxpayers do.

How to protect yourself:

• File your taxes early to beat scammers to the punch.
• Use an Identity Protection PIN (IP PIN) from the IRS for added security.
• Monitor your credit report and Social Security statements for suspicious activity.

Key Tips to Stay Safe

• Verify IRS contact: The IRS will contact you by mail first -not by phone, email, or social media.
• Protect your SSN: Keep your Social Security number secure and share it only when absolutely necessary.
• Shred sensitive documents: Don’t leave paper trails for scammers.
• Double-check preparers: Use the IRS directory to find legitimate tax preparers.

Final Thoughts: Trust Your Gut Tax scams thrive on urgency and fear. If something feels off, step back and verify. By staying informed and cautious, you can protect yourself from becoming a statistic. For more details on tax scams, visit the official IRS page HERE