Earn Taxes

Top 10 IRS Scams To Watch Out For

Casandra Andrews  |  March 27, 2023

Federal income taxes are due in just a few weeks. Here's how to avoid many of the most common tax and IRS scams. 

It’s that time of year again. While many Americans are dutifully preparing their income tax returns ahead of the April 18 filing deadline, scammers are descending – calling, emailing, even blasting deceptive radio and TV ads – all in an effort to steal money and information from unsuspecting taxpayers. 

New research from BeenVerified shows that tax and IRS-related scams were the third most reported spam calls in 2022, up more than 55% from last year. While scams from phony IRS agents claiming you owe back taxes have been around for decades, scammers often throw in new twists to dupe their victims, taking advantage of natural disasters and older residents.

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Julianne Ohlander, senior data analyst at BeenVerified, says it’s an unfortunate trend. “People want to make sure they do everything correctly on their taxes and might be misinformed about some aspects of it, so it’s an easy topic to use to trick people,” she explains. “Every year people give out their sensitive information to get their taxes done and the threat of being in trouble with the IRS can be daunting.”

Because no one wants Uncle Sam breathing down their neck, that fear is a vulnerability scammers take full advantage of. Here are 10 of the top tax and IRS scams to watch out for.

Phishing For Personal Info

Know this: The IRS says it will never contact you via email about a tax bill, refund or anything else. That’s why you should never click on links in emails claiming to be from the IRS. In the last few years, there was a spike in scams that used the keyword “stimulus” to lure in people eager to get a check, and a spike in scams related to the student loan forgiveness proposal. In other words, scammers know how to target us, so be careful what you click on, and always use a strong password for every site you use. 

Bogus Charities

Scammers often look to exploit natural disasters and other times of crisis by setting up fake charities to steal from their victims. These fraudulent schemes, the IRS notes, often begin with a cold call, an unsolicited text, or a social media message or e-mail. Real charities will be able to provide you with an Employer Identification Number (EIN) to prove they are legit. To ensure a charity is on the up and up, you can use this search tool on IRS.gov, and check out Charity Navigator, a charity vetting and ranking site. 

Threatening Phone Calls

Tell your parents and older family members that if someone calls and says they are from the IRS, hang up the phone immediately. Oftentimes these calls can be frightening, and will warn of jail time for not handing over personal information. The IRS will never threaten or surprise you with a demand for immediate payment by phone. Instead, they would send a letter through the mail.

Social Media Scams

The blessing and the curse of social media is that it allows people to share information online. But while sharing your wedding photos with your BFF is great, getting a scam friend request from someone posing as that BFF is not. These friend requests may be an attempt to gain access to your personal information. Social media scams, according to the IRS, have led to an uptick in tax-related identity theft. 

With social media-related identity theft, someone would use your information (name, Social Security number, address, date of birth, etc.) to file a fraudulent tax return. Their goal would be to file a return that would generate a sizable refund, and then cash the check for themselves. This can become a nightmare for you — you might owe the IRS money, or get denied a refund when you file your real taxes. Never ever accept friend requests from people you don’t know, and if you have your birth date displayed on any social media platforms, it’s time to scrub it. 

Seniors Targeted For Fraud

Older Americans are more likely to be targeted by scammers than any other group, notes the IRS. Thankfully, the IRS also knows that “elder fraud goes down substantially when the service provider knows a trusted friend or family member is taking an interest in the senior’s affairs.” Essentially, younger tech-savvy (and scam-savvy) individuals in an elderly person’s life can be the first line of defense against scams. Caregivers should be on the alert for phony emails, text messages, websites and social media attempts to steal personal information, notes the IRS.

‘Ghost’ Tax Preparers

As much as we wish we could trust all people claiming to be an expert tax preparer, there are bad apples out there committing fraud. “Ghost” tax preparers are so-named because they refuse to sign the tax returns they prepare — this is because they are illegal and unlicensed. They often lure people in by charging lower fees than a licensed preparer, or by promising a big refund. But if your return is done improperly, you’re on the hook to pay any penalties and interest. In other words, the only people who should ever be touching your taxes are licensed professionals. Visit IRS.gov for tips on choosing a preparer.

Sketchy Tax Debt Resolution Offers

File this under ‘if it sounds too good to be true, it probably is.’ The IRS warns that you should be extremely cautious of companies claiming they can settle your tax debts for “pennies on the dollar.” Only people who meet extremely specific criteria under the law would be eligible for such an offer, and only the IRS can tell you if you qualify. 

Fake Payment & Repayment Demands

We already talked about the risk of tax related identity theft where a criminal steals your personal information, fraudulently files taxes in your name, and then snags your refund. There’s another one related to this where the scammer actually has the fake refund money deposited into YOUR account. Then, they call you, pretending to be from the IRS, and say there’s been an error. They say that the money needs to be returned ASAP, or penalties will accrue — or maybe that you’ll go to jail. The scammer will then instruct you on how to pay “back” the money, usually via electronic transfer or gift cards. If you see a huge refund that you weren’t expecting hit your bank account, call the IRS immediately, and never ever accept a call from anyone claiming to be with the IRS. 

Fake Employment Offers On Social Media

So far in 2023, 494 tech companies have laid off 138,820 people, according to tracking data from Layoffs.fyi. As more people look for work, the IRS cautions us to watch out for fake job listings. These job listings will ask you to provide your personal information right out of the gate, often via social media. But a real job with a real company will always involve several rounds of interviews with actual humans before anyone asks for your Social Security number. (And when they do ask, it will likely be via an official and secure application portal, not a DM.) If you’re intrigued by a job listing, first Google the company and look them up on Glassdoor before you apply. You probably already guessed the tax risk here — all your personal information that you’d give someone when applying for a job can be used to file a fraudulent income tax return or steal your identity. 

Payroll & Human Resources Scams

On the topic of job-related tax fraud, the IRS is warning tax professionals, employers and taxpayers to be on the lookout for phishing attempts aimed at stealing W-2s and other sensitive tax information. These scams can come in the form of email or phone requests for wire transfers or payment of phony invoices. Additionally, some scams may appear to be a legitimate request from a company employee seeking their W-2 from their payroll or HR department. (In other words, companies have to be just as diligent as consumers these days!) Such scams should be forwarded to the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) where a complaint can be filed. The IRS asks that W-2 scams be reported to: phishing@irs.gov, with the subject line: “W-2 Scam.” 

How To Report Scams & Identity Theft  

If you think you’ve been scammed or a victim of identity theft involving your income taxes, the IRS has a variety of ways to contact them for further assistance. Check out the taxpayer guide to identity theft to learn more. 

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