Cyber Security

IRS Tax Scams: How to Deal with Them

Scammers are all over the place. They are con artists who like to prey on people. They employ different tactics to get ahead of the game and not get caught. Some pretend to be distant relatives while others claim to represent companies. Others even say that they represent the legal department of a company and claim that your captive insurancehas violated the law.

IRS Scams and How to Deal with Them

Every year, there seems to be no shortage of scammers, especially around tax season. The IRS issues regular warnings against tax scammers to make the public aware of their modus operandi.

According to a report from the Federal Trade Commission, about one out of five people fall victim to tax scams in 2018 with a loss of nearly $488 million. The following are the most common tactics scammers employ:

  • Scare Tactics

Most scammers exploit people’s natural fear of the IRS to scare them into giving out sensitive information over the phone, by email, or snail mail. In some cases, they plant malicious software, or malware via links or attachments online. This allows them to access personal files to get all the information they need to take money from them.

  • The Dirty Dozen

Scammers just keep coming back. They will find ways to trick you over again. The IRS has a list they update yearly containing the most common scams that are going around. They call it The Dirty Dozen. To get your attention, scammers will call you and use any of the following against you:

  • Non-payment of a non-existent federal student tax
  • Affordable Care Act-related penalties
  • Back Taxes
  • A non-existent investigation or probe against you

Some get a little more creative and pretend they represent charitable institutions looking for donations or tax professionals to get you bigger tax returns. Keep in mind that none of these are true.

  • Phone Call Scams

Most IRS scams happen over the phone. They try to convince you they are from the IRS by spoofing their caller ID information. They call their targets, with enough information about them, asking the prospective victim to send money immediately through debit and gift cards or wire transfer which are hard to trace. It is important to note that the IRS will never call you, at least not for the first contact. They will send a letter your way via snail mail first before anything else. Only when they do not get a response from you will they call you.

What to Do in Case a Scammer Contacts You

Hacker stealing money

Never return a phone call from a supposed IRS agent. Call the IRS local office nearest you and bring this to their attention. According to the U.S. Department of Justice, the IRS does not discuss personal tax issues over social media or through unsolicited text and email messages. If you receive a suspicious email from the IRS, forward the message to them at phishing@irs.gov. If you believe you have fallen prey to con artists, immediately report the incident to the Treasury Inspector General for Tax Administration.

Anybody can be a victim of a tax scam because criminals are continually thinking of new ways to con people. It is important for the public to be aware of their movement and schemes to protect them and to immediately report such incidents to the IRS.