It’s tax return time, and that means it’s time for fraudsters to come out of the woodwork and prey on unsuspecting victims.
Two of the most prevalent fraudulent activities that occur at this time of the year involve telephone and online scams. In fact, both of these rank among the “Dirty Dozen Tax Scams” compiled annually by the Internal Revenue Service (IRS).
The federal agency has reported experiencing a surge in phone tax scams as fraudsters threaten victims with police arrest, deportation, court action, and license revocation if they don’t cooperate.
“Taxpayers across the nation face a deluge of these aggressive phone scams. Don’t be fooled by callers pretending to be from the IRS in an attempt to steal your money,” IRS Commissioner John Koskinen said in a recent press release. “We continue to say if you are surprised to be hearing from us, then you’re not hearing from us.”
Last month, the Treasury Inspector General for Tax Administration (TIGTA) announced they have received reports of roughly 896,000 contacts since October 2013 and have become aware of over 5,000 victims who have collectively paid more than $26.5 million as a result of phone scams.
According to the IRS, scammers make unsolicited calls claiming to be IRS officials. Their tactics include demanding that the victim pay a bogus tax bill or face retaliatory action. They con the victim into sending cash, usually through a prepaid debit card or wire transfer. They may also leave “urgent” callback requests through phone “robo-calls.”
The agency reported that scammers often alter caller ID numbers to make it look like the IRS is calling. The callers use IRS titles and fake badge numbers to sound legitimate. They may also use the victim’s name, address and other personal information to make the call sound official, the IRS stated.
Here are five things phone scammers often do but the IRS will not do:
- Demand immediate payment. The IRS will never call about taxes owed without first having mailed you a bill.
- Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
- Require you to use a specific payment method for your taxes, such as a prepaid debit card.
- Ask for credit or debit card numbers over the phone.
- Threaten to bring in local police or other law enforcement groups to have you arrested for not paying.
If you get a phone call from someone claiming to be from the IRS and asking for money, follow these agency recommendations:
- If you don’t owe taxes, or have no reason to think that you do, do not give out any information and hang up immediately.
- Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” form available at https://www.treasury.gov/tigta/contact_report_scam.shtmlAs a courtesy, you will be leaving Blog.BankFive.com and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of BankFive.com. Come back soon! or call 800-366-4484.
- Report the call to the Federal Trade Commission. Use the “FTC Complaint Assistant” on www.FTC.govAs a courtesy, you will be leaving Blog.BankFive.com and going to another website. We have approved this site as a reliable partner, but you will no longer be under the security policy of BankFive.com. Come back soon!. Add “IRS Telephone Scam” in the notes.
As for online scams, several variations exist. Criminals may pose as a person or organization you trust and/or recognize. Or they may hack an e-mail account and send mass e-mails under another person’s name. In addition, they may pose as a bank, credit card company, tax software provider or government agency.
The IRS points out that fraudsters also create websites that appear legitimate but contain phony log-in pages. The crooks use this approach to access the victim’s money, passwords, Social Security number or other personal information.
If you receive an unsolicited e-mail that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to firstname.lastname@example.org.
Keep in mind that the IRS generally does not initiate contact with taxpayers by e-mail to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.
The IRS and U.S. Treasury also encourage taxpayers who are expecting refunds to use direct deposit instead of having paper refund checks mailed to them, in large part because direct deposit is simple, safe and secure.