1. Aggressive agents
Telephone scammers can be slick, cool, and convincing. They’ve honed their pitches to perfection, so don’t be shocked if you find yourself believing for a moment that the person on the other end of a phone call really is an IRS agent. Remember, the IRS will almost never call a taxpayer. Do note that if the “agent” turns aggressive—threatening arrest or other criminal action—it’s time to hang up. Real IRS agents do not back up demands for payment with threats of police action. If your caller does, you can be sure the call is a hoax, and the caller a scam artist.
Often, the tax scammers are hoping to connect with a newcomer to the US, someone who might not know how the IRS works. Some scammers actually demand a cash drop at a local business or other phony location, something the IRS would never do. The IRS impersonator might threaten deportation for nonpayment, another break with IRS procedure.
If you receive a call from an IRS impersonator, simply ask for the “agent’s” name, title, and telephone number. Your next call should not be to that number, however. It should be to the police.
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2. Phishing emails
Just as telephone scammers have polished their pitches to sound convincing, so too have email scammers created evermore official-looking emails designed to trick you into thinking the IRS is contacting you. The typography, the logos, even the email addresses bear a striking resemblance to official correspondence. The words can sound official, too, referring to a tax bill or promising a refund you’re not expecting. Don’t be fooled. The IRS does not email taxpayers regarding their accounts. It still uses the US Postal Service to communicate official business. Such emails are phishing for your Social Security number or attempting to steal other personal information. Do not even open such emails, but if you do, resist the urge to click on any links or to provide personal details, credit card numbers, or your bank account information.
3. Fake filings
If a criminal manages to obtain your Social Security number, you may be in danger of having a fake tax return filed using your tax ID. The scammer isn’t trying to pay your taxes for you. He or she is planning to take your tax refund. The scammer files what appears to be a legitimate tax return, but changes the bank account details so the refund is direct-deposited into their account, not yours. You never even know it was done. The IRS admits to having paid billions of dollars in fraudulent refunds. The scam works best early in the income tax season, before the legitimate taxpayers have filed their returns. If you’re expecting a refund, file your return as early as possible to freeze out potential scammers. And always protect your SSN.
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4. Big refunds
Most of us are impressed when someone offers to back up a promise with results, but this can be expensive when it comes to filing a tax return. Income tax scammers often promise their victims to file tax returns on their behalf for nothing more than a percentage of a big refund. The IRS reports that these con artists may take out alluring ads, pass out flyers, or even set up storefronts to attract their victims. If someone estimates your taxes without documentation or promises a big refund in return for signing a blank tax return, decline the invitation. They’re likely setting you up to steal your refund or sell your private details to hackers.
Such “free money” scammers often target churches and nonprofit organizations that are used to having volunteers perform various tasks. You may accept the tax preparation help without realizing that the scammer intends to file an exaggerated, incorrect return and then make off with the extra large refund.
5. Phony charities
Donations to legitimate charities usually are tax-deductible, and some scammers use a taxpayer’s knowledge of this fact to get them to give money to a phony charity to earn a tax break. These scammers often target families that have lost a loved one to a particular disease, knowing that the family might wish to make a donation in the loved one’s name to help prevent future tragedies. If you receive a telephone call or even an in-person solicitation to make a donation to a charity, don't give the person cash or your financial information. Instead, verify the legitimacy of the charity by using the IRS Exempt Organizations Select Check tool.
If you’re concerned about the legality of a tax scheme, be sure to do your research. To learn more about other tax scams and how to stay safe, visit TurboTax.com.