Look Out for Scams Targeting Taxpayers
Tax-related scams lurk year-round but you may be more likely to encounter one during tax season when you’re expecting W-2s and other tax documents.
It's not unusual for a tax preparer or online tax service you've worked with to email or call you to promote their business. That can make it difficult to know what's legitimate. Learn how to recognize possible traps and protect yourself so you're less likely to become a victim.
Email Phishing Attacks
In an attack that's trending, phishing emails impersonate ADP, one of the largest HR and payroll companies in the world. The email offers a link to download the user's W-2 form. Clicking the email link lands the user on a spoofed ADP log in page where they enter their ADP credentials. The fraudsters then use these credentials to log in and change the user's bank account direct deposit information.
Phishing emails that impersonate the IRS or a tax professional may remind users to file their taxes or verify personal information, or offer to provide information about their refund.
If you do open an email and click links, there's always a chance that doing so will infect your computer with malware—and any information you input through these links can be used to steal your identity.
There's no perfect way to tell if any email related to your taxes is a trap. The best advice is not to click the links. Instead, go to the website on your own and log in from there, or look for the contact number on the official website.
Fake Tax Returns and Scary Phone Calls
Sometimes, fraudsters will file a fake tax return in an unsuspecting person's name. They may have the refund deposited to the victim's bank account and then contact the victim by phone under the guise of the IRS or a collection agency for the IRS demanding the money be returned.
Phone calls could come from a person or an automated robocaller claiming to be the IRS. They may threaten fraud charges, an arrest warrant, and a “blacklisted” SSN. Messages often include a case number and phone number they tell the victim to use to return the refund deposited in error. Any instructions they provide for returning the money will route it directly to the fraudsters.
In similar schemes, the fraudsters may file the fake return but the victim doesn't find out until they try to file their real tax return and it's rejected as a duplicate filing.
Remember, any communication related to your taxes has the potential to be fraudulent. Your best bet is to hang up and call back using the correct phone number listed on the IRS.gov website.
Preventing Tax ID Theft
The FTC advises consumers to follow these guidelines for protection from tax identity theft throughout the year:
- Always protect your Social Security number (SSN). Know exactly who you're sharing it with and why.
- File your tax return as early as possible.
- Make sure your internet connection is secure if filing electronically, or take your paper tax return to the post office and mail it from there.
- Don't hand over personal information without thoroughly researching a tax preparer.
- Keep an eye on your credit report. Check it for free once a year at annualcreditreport.com. Make sure no accounts have been opened in your name.
- The IRS doesn't call and demand money. They'll send a notice by mail if you need to take action. This article explains how the IRS initiates contact with taxpayers.