If the IRS calls about an error or missing information on your tax return, think twice before handing over personal information like your address, birthdate or Social Security Number to resolve the issue. Chances are good it’s a scammer, not the IRS, on the other end of the line.
Tax scams are rampant. In 2015, the IRS rejected or suspended 4.8 million suspicious tax returns and stopped $2.9 billion in fraudulent returns, according to one report.
Scams range from phone calls asking victims for “missing” SSNs (which fraudsters use to open credit card accounts) to sending fake tax bills and demanding payment. And scammers will reach out via email, postal mail, phone and even social media to lure victims into giving up personal details or opening their pocketbooks.
Follow these six tips to avoid falling victim to tax scams:
1. Hang up the phone and delete emails: No one wants to be on the wrong side of the IRS, but it’s OK to hang up the phone if an “IRS representative” makes threats for refusing to hand over information. The IRS does not phone or email taxpayers; official notifications are always sent through the mail. All other methods of communication should be treated as spam.
2. Go through official channels: Ignore emails with links to check the status of your refund, which could lead to a computer virus, and go to the IRS website instead. The Where’s My Refund? tool is a safe way to determine when a check will arrive. Your accountant can review your return to see if information, like a signature, is missing.
3. Protect yourself: Don’t make it easy for scammers to access your personal information. Shred any documents with your address, birthdate or SSN; use strong passwords for online accounts. To combat tax scams, the IRS created stronger standards for online tax programs, including passwords with eight-plus characters and a combination of upper-and lower-case letters, numbers and special characters.
4. Be on alert: Watch for red flags that a site isn’t authentic. Website addresses that don’t match a website name, for example, are warning signs of fraud. Common sense should also prevail: Scammers who insist that tax debts are settled immediately with a prepaid debit card or iTunes gift card should be ignored. The IRS never demands immediate payment and never requires specific methods of payment.
5. Don’t get greedy: The tax code is ironclad, so promises of larger refunds, tax shelters and overseas accounts to avoid tax debt should be immediate warning signs of a scam. Fraudsters will make wild promises to get you to hand over your SSN, account numbers and other information that can be used to steal your identity or access your bank accounts. Complex tax avoidance schemes may also be illegal.
6. Report fraud: If you receive questionable emails, phone calls or social media messages or fall victim to a tax scam, file a report with the IRS. The IRS also posts information about known scams on its website; check it to learn more about what to watch for.
The more informed you are, the less likely you’ll be to fall victim to a tax scam. Arm yourself with these tips. Consider discussing Identity Theft Protection with your Farm Bureau agent to make identity theft clean up a little easier if you do fall victim to fraud scams.