Originally Appeared in USNews – Money Section:
By Paul Sisolak
During tax season, scammers, rip-off artists and other unscrupulous people are looking to get their hands on your tax refund.
According to a 2015 Government Accountability Office report, the IRS prevented or recovered a total of $24.2 billion in fraudulent refunds stemming from identity theft in 2013 and paid $5.8 billion in fraudulent refunds.
Tax scams are so prevalent in part because fraudsters have become highly skilled at making their offers or emails seem genuine. You can avoid falling victim to tax fraud and make sure your tax refund isn’t stolen by watching out for the following methods people use to try to scam you.
1. Identity Theft
It’s the No. 1 scam on the IRS Dirty Dozen list. One of the first things scammers do is steal your personal information, such as your Social Security number, to file a false tax return under your name or ID. Taxpayers usually don’t discover they’ve fallen prey to this until after they file their real tax returns and the IRS informs them that a return with their identification information has already been filed.
If this happens to you, your tax return might now be in someone else’s possession, and your information could be vulnerable to other fraudulent activities. Although the IRS has adopted safeguards to protect against fraudulent tax returns and ID theft, you can protect yourself by never divulging your Social Security, credit card or tax information to anyone who isn’t a licensed tax professional or certified financial advisor or to a legitimate service for e-filing your tax return.
2. Phony IRS Phone Calls
A surprise call from someone claiming to be with the IRS can scare anyone. Scammers will try to play into your initial fear by saying that you owe back-taxes and that failure to pay might result in your arrest or deportation. The number on your caller ID will likely seem legitimate, and the caller might provide a fake ID number or employ other ruses to make the call sound like it’s really coming from an IRS office. For example, they might already have some of your personal information to lure you into believing them.
Note: The IRS will never call you to demand immediate payment, ask for your credit or debit card number over the phone or threaten to have you arrested for not paying, according to the IRS website. If you owe the IRS money, the agency will mail you a bill. If you receive a call from someone claiming to be with the IRS, the IRS website instructs you to hang up immediately and not give the caller any information.
3. Tax Phishing
Many con artists have switched from making phone calls to designing fake emails – and websites – that look like official IRS correspondence. And it’s not just taxpayers who get targeted. Tax professionals and accountants are also victimized. According to the IRS, one tax phishing scam sends tax professionals an email requesting they update their IRS e-services portal information and electronic filing ID numbers. The bogus links in the email can capture tax preparers’ usernames and passwords. The IRS does not send these kinds of emails. Disregard them and don’t click on the links included in them.
4. E-Filing Scams
Another type of scam similar to phishing is the “Update your IRS e-file” trick. This is also an email fraudulently claiming to be from the IRS and directing taxpayers to make changes to their electronic filing preferences. The IRS warns to watch for the following specific red flags in these emails:
- “IRSgov” without a dot between “IRS” and “gov”
- USA.gov, which is not part of the IRS
5. Mock Charity and Nonprofit Groups
Thieves looking to bilk you out of your money also exploit charitable organizations by asking people to donate money. They might use a real problem, such as a recent natural disaster in the news, or pretend to be from a real charity or nonprofit group.
Don’t underestimate these scammers. They research real charities carefully to create phony websites that look genuine and they work hard to sound legitimate on the phone. If you’ve been approached or contacted by one of these groups come tax season, go to the IRS website to find out if the organization is real and registered as a 501(c)(3). The IRS website offers an “Exempt Organizations Select Check” search tool, and shares information and other websites to help you tell the real charities and nonprofits from the fake ones before you start claiming your donations on your tax return.
6. ‘Too Good to Be True’ Refund Offers
The IRS Dirty Dozen list also warns of inflated tax refund offers. If someone promises to get you a big tax refund without looking at your records and asks you to sign a blank tax return form, then that person is trying to scam you. Similarly, an offer to charge a tax-preparation fee in the form of a percentage of your refund is also a scam.
Tax scam artists and criminals who are attempting to steal your personal information and money use multiple kinds of phony advertisements, emails, fake websites, business cards and other means to entrap you. Some even try to ingratiate themselves with community groups to build up good word-of-mouth for their fake services, according to the IRS. This tax season, you can avoid becoming a victim of tax fraud or ID theft by deleting suspicious-looking emails, hanging up on scammers who call you and filing your taxes through legitimate tax-preparation service providers.
You also can potentially further protect yourself by not rushing through the tax-filing process. Last-minute filers can be targets for these tax scams. If you file your taxes sooner than later – and with a real e-file service or tax professional – you can get your real tax return to the IRS before a scammer sends in a fake one with your stolen information.