Scammers are everywhere. They do whatever they can to stay ahead of the game and not get caught. They may seem innocent at first, playing on your emotions to get you to talk before they sucker you into giving up your personal information and money. Some pretend to be long lost relatives, while others call about pretend problems with your internet connection or operating software. Some of the most popular scams involve people pretending to be from the IRS, threatening arrest if you don't comply with their requests.

Authorities say thousands of people鈥攆rom ordinary citizens to professionals鈥攆all prey to these scams each year, losing millions of dollars in the process. According to a Federal Trade Commission (FTC) report, nearly one in five people who reported being scammed were victims of imposter scams in 2019, with roughly $667 million lost, up from $488 million in 2018.锘匡豢

How do IRS scammers go about stealing your personal information? They can procure from many sources, including you. Below, we've described the most common tactics scammers use to get your information, along with some tips on what to do if you think you've been targeted.

Key Takeaways

  • Thousands of people fall prey to IRS scams each year, losing millions of dollars in the process.
  • Scammers try to scare people into providing sensitive information or money. They use phone, email, or postal mail, and if posing as the IRS is not enough, they may threaten arrest, deportation, or other harm to get what they want.
  • If you think you may have been contacted by a scammer, report the suspicious call or correspondence to the IRS.

Tax Scams: The Fear Tactics Scammers nba腾讯体育直播e

Your personal information is stored in so many places: on printed documents, on your computer hard drives and USB drives, on your smartphone and tablet, in the cloud, with your employer, with your doctor, with your financial service providers, with your tax preparer, and with the Internal Revenue Service (IRS). Within this data鈥攅specially your tax returns鈥攊s valuable personal information like your Social Security number (SSN), address, phone number, profession, marital status, and how much money you make, all information that can be used to impersonate you or intimidate you.

While some scams, such as tax refund fraud, are directly related to tax returns, others take advantage of people鈥檚 deep fear of the IRS to scare them into providing sensitive information鈥攐r, better yet, money. These scams may be initiated by phone, email, or postal mail and may involve your computer files or your bank account.

While you can鈥檛 possibly prevent all types of tax-related fraud that may affect you, you can educate yourself about how these tax scams operate to limit your chances of becoming the victim of a crime you might be able to avoid or mitigate.

The IRS's "Dirty Dozen" Tax Scams

Each year, the IRS publishes a list of what it calls the "dirty dozen"鈥攕ome of the most common tax scams currently circulating.锘 In 2020, new scams have emerged to take advantage of coronavirus tax relief. The IRS cautions taxpayers to be especially vigilant for these 12 scams:

  1. Phishing: Emails and websites pretend to be from the IRS to entice people to divulge personal or financial information.
  2. Fake charities: Fake charities that often have names similar to real charities make contact with individuals to solicit money or personal financial information.
  3. Threatening phone calls: Criminals posing as IRS agents threaten people with arrest, deportation, license revocation, or Social Security number cancellation if they don't make an immediate payment.
  4. Social media scams: Scammers impersonate you to go after your friends and family, or impersonate your friends and family to go after you.
  5. Economic Impact Payment and tax refund theft: Criminals file false tax returns posing as you to direct illegitimate tax refunds to themselves. Also, nursing home and care facilities have tried to steal CARES Act relief (stimulus payments) from patients.
  6. Senior fraud: Any of the frauds listed here tend to be directed more often at seniors than other groups. In addition, seniors are targeted through professional and personal relationships, especially when no one appears to be looking out for them.
  7. Scams targeting non-English speakers: The third scam listed above, threatening phone calls, is a heightened threat to individuals who have limited or no English skills and may have poor access to information meant to warn them about such scams.
  8. Dishonest tax preparers: They will prepare your tax return but they they won't sign it and they don't have a valid Preparer Taxpayer Identification Number. They take advantage of people by preparing fraudulent returns that offer inflated refunds.
  9. Tax debt resolution mills: These charge you money under the false premise that they can get you an Offer in Compromise to settle your tax debt with the IRS for pennies on the dollar.
  10. Bogus refunds: The scammer not only uses your information to claim a false refund, but allows it to be deposited into your bank account. Then they call you and pose as an IRS agent demanding that you return the money via gift card to avoid interest and penalties because the refund was made "in error."
  11. Business email scams: Scammers target companies to seek payment of fake invoices, to steal employees' tax information, or to change employees' direct deposit information to steal their pay.
  12. Ransomware: This software infects the victim's computer, then makes its data inaccessible. Payment is demanded to restore access to locked files.

Let's look at how IRS scammers contact people in more detail.

Phone Scams

Scammers carry out the majority of their schemes by phone. They try to convince callers they are legitimate IRS employees by spoofing caller ID information, using fake or even real IRS employee badge numbers, and having key information about their targets.聽The IRS calls these scammers aggressive and sophisticated.

Callers may try to convince their targets to send them immediate payment through a preloaded debit card, gift card, or wire transfer鈥攚hich can be hard to track. Even if you discover you've been scammed, recovering your money is virtually impossible. Scammers may also ask targets to hold up their credit cards to the camera in their phone or computer through a video call in an attempt to get their payment information.

Email Scams

Email scams are another major threat.聽You receive an email that appears to be legitimate because the scammer appropriates the IRS logo or a legitimate tax software company鈥檚 logo.锘 The email may claim to be about your refund, filing status, personal information, or e-File PIN.聽

Links in the email direct you to websites that look legitimate but are actually operated by scammers who want to steal your information so they can claim fraudulent tax refunds in your name. These sites may also contain malware that gives criminals access to your files or tracks your keystrokes without your knowledge to steal your website logins and passwords.锘 The IRS cautions taxpayers that it does not initiate contact by email to request personal or financial information.锘柯

COVID-19 Tax Scams

Criminals have been taking advantage of the pandemic to exploit people.锘 Scams the IRS has identified include these five:

  1. fake charities
  2. websites selling fake medical supplies
  3. offers to invest in companies developing COVID-19 vaccines or treatments
  4. theft of Economic Impact Payments
  5. phishing emails

Signs You May Be a Victim

Aside from realizing after the fact that you gave your credit card number or submitted a wire transfer to someone posing as an IRS agent, the following signs鈥攅xplained by tax preparer Abby Eisenkraft in tax fraud seminars for , a knowledge-sharing site for accounting professionals鈥攃ould indicate that you鈥檝e been the victim of tax-related identity theft:

  • Your tax return is rejected when you file it. This could happen if someone has already filed a fake return using your SSN in order to claim a fraudulent refund.
  • You receive a letter from the IRS that asks whether you sent in a tax return containing your name and Social Security number. This letter could indicate that someone else has attempted to file using your information.
  • You receive a W-2 or 1099 from an employer for whom you have not worked. To see if it's legitimate, Google the company鈥檚 name. It could be that the name you know the company by is different from its official name that appears on tax documents.
  • You receive a tax refund you didn't file for. While the IRS does issue refunds if it catches an overpayment error on your tax return (yes, really), you can expect to receive a letter of explanation first.
  • You receive a tax transcript by mail that you did not request. A tax transcript is a document showing most of the line items from your originally filed tax return but not any changes you may have made after you filed the return.

What to Do

If you receive any communication that appears to be from the IRS, don鈥檛 panic. Depending on what type of communication you receive, here's what you should do.

Email

If the contact is initiated via email, it鈥檚 fraudulent. Do not respond to the email, click on any links in it, or download any attachments to it. Forward the message to phishing@irs.gov, then delete the original email.

Telephone

Do not assume a phone caller claiming to be from the IRS is legitimate, even if your caller ID has a Washington, D.C., area code or says Internal Revenue Service. These details can be spoofed.

Don't provide the caller with any information. Say you cannot talk at the moment and will call back shortly. Do not ask for a phone number, but do ask for the caller's name and badge number. Then contact the Treasury Department directly by calling their fraud hotline: (800) 366-4484.锘 You will be able to find out if the call was legitimate using the information you've obtained. You can also call the IRS directly at (800) 829-1040.

The caller may have provided you with a fake IRS employee name and badge number to try to keep you on the line so you'll give them the information they want. Or, they might just hang up, realizing you're not an easy target. If that happens, you can immediately report the call to the Treasury Inspector General for Tax Administration. Email phishing@irs.gov using the subject 鈥淚RS Phone Scam.鈥

The IRS will never call you to threaten arrest, nor will they send the local police to arrest you.锘 There are cases where federal officers arrest people for tax fraud.锘 But these arrests don't occur out of the blue. Ordinary citizens who have simply made a mistake on their tax returns are not at risk of going to jail over unpaid taxes.

Text message

If you are contacted by a text message that claims to be from the IRS, it鈥檚 a scam.聽Do not reply, open any attachments, or click on any links in the message. Instead, forward the text to the IRS at (202) 552-1226. If possible, send the IRS a second message with the number from which the fraudulent text originated, then delete the fake IRS text message.

Mail

If the contact is via postal mail, it may or may not be legitimate. Scammers have sent fake IRS notices by mail, but the IRS contacts taxpayers by mail, too. These notices can be challenging to authenticate, but here are a few clues.

The IRS uses form CP2000 to inform taxpayers of proposed IRS adjustments to their returns. Scammers send out fake CP2000 forms that have an illegitimate IRS address, ask the taxpayer to make the check out to the IRS rather than the United States Treasury鈥攚hich is how you make out a check to the genuine IRS. They will also instruct the taxpayer to send payment immediately and dispute it later, even if he or she disagrees with the amount of the notice.锘柯燭he real IRS allows taxpayers to dispute claims of unpaid taxes first and pay after an agreement is reached.

Rather than immediately assuming that an IRS letter requesting payment or personal information is real, go to IRS.gov and search for the relevant notice or form number and read the IRS鈥檚 page . You can also call the IRS directly to inquire about a letter鈥檚 legitimacy.

The Bottom Line

Anyone can become a victim of an IRS-related scam because there are so many ways for criminals to steal your personal information without your knowledge, ranging from good old-fashioned hacking and phishing to social engineering through manipulating you, your family, your friends, or your employer. Your odds of becoming a victim will go down if you鈥檙e aware of the scams and learn how to avoid cooperating with them: don't provide information in response to an unsolicited phone call or email, for example.

New scams emerge all the time, so聽listen to your gut if anything seems suspicious. Don鈥檛 engage with anyone who reaches out to you about your taxes and always contact the IRS directly by using the information at the official IRS website, IRS.gov, if you have any concerns. The IRS and other agencies rely on you to bring these scams to their attention. If you make a report today, you may be helping someone later on.