How to Avoid Tax Fraud and More

April 15, 2021

Tax scams strike every tax season, and they’re constantly changing. Here are some of the most prevalent scams facing members this year and how to avoid becoming a victim of fraud.
 
How to Recognize a Scam
Before we review the common scams of 2021, let’s take a look at some general ways to protect yourself:  
 
  • The IRS does not initiate contact via email, text message, or social media to request your personal or financial information.
  • The IRS will never demand immediate payment using a specific payment type — you’ll receive a bill via regular or certified mail.
  • The IRS will never threaten you with action from law enforcement. Additionally, they can’t revoke your driver’s license, immigration status, or business license for non-payment.
 Please know that you have the right to question or appeal any amount you owe the IRS.
 
Top Four Tax Scams to Avoid
As of March 2021, the IRS has warned of the following four tax scams:
 
Scam #1 – Claiming to Suspend Your SSN
While this scam has been around for a while, its most recent evolution involves fraudsters claiming they will cancel or suspend your SSN if you don’t answer a call or return it immediately. This is a scam, and you should hang up and block the number immediately.
 
Scam #2 – IRS Impersonation Emails
Phishing scams are a common tactic among cyber thieves, and they’re not limited to tax-related scams. This year, one common tactic is to send emails to taxpayers that look like they’re from the IRS — the email will contain a subject line that states, “Automatic Income Tax Reminder” or “Electronic Tax Return Reminder.” The email includes a link to a website that looks like the IRS site and will offer a temporary password to access files for your tax refund. Unfortunately, these files contain malware that will gain control of your computer or track your computer’s keystrokes to obtain your passwords.
 
REMEMBER: The IRS will never contact you via email. Do not open emails from anyone claiming to be from the IRS, and certainly don’t click on links or download files from these emails.
 
Scam #3 – Calls from the Taxpayer Advocate Service
This tax season criminals are claiming to be from the Taxpayer Advocate Service (TAS), which is a legitimate, independent organization within the IRS. They are calling innocent taxpayers demanding payment or stating you have an unclaimed refund. They’ll attempt to get personal information from you, but you shouldn’t provide it.
 
PLEASE NOTE: The TAS follows the same guidelines as the IRS (stated above). Don’t give out any information to these callers and hang up immediately.
 
Scam #4 – “Ghost” Tax Return Preparers
Another recent development is the introduction of “ghost” tax return preparers. These fraudsters don’t have legitimate tax preparation credentials and require payment in cash, or they won’t provide a receipt of your tax information or that they’ve submitted your taxes. Additionally, they may also invent income or claim fake deductions to boost your refund, demanding payment in the form of a percentage of your tax refund.
 
IMPORTANT: Legitimate tax accountants will have credentials that qualify them to handle your taxes. They’ll never promise you a large refund, will offer several payment options, won’t try to pad your return, and will always sign the return and include their Preparer Tax Identification Number for legal purposes.
 
Report Scams Immediately
Report any phone calls or emails from scammers to phishing@irs.gov.
 
Learn more about how to protect yourself from fraud
 
 
 

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