Tax season is prime time for scammers looking to exploit unsuspecting taxpayers. Fraudsters use fear, urgency, and sophisticated tricks to steal your personal information, tax refunds, and even your identity. Falling victim to these scams can result in financial loss, legal trouble, or worse.
Stay ahead of the game by recognizing these five IRS tax scams that could cost you thousands.
1. Fake IRS Phone Calls
One of the most common scams involves fraudsters impersonating IRS agents over the phone. They often use aggressive tactics, such as threatening arrest, lawsuits, or deportation if you don’t pay an alleged tax debt immediately.
Warning signs:
- Calls demanding immediate payment via gift cards, wire transfers, or cryptocurrency.
- Threats of law enforcement action if payment isn’t made instantly.
- Caller ID spoofing that makes the call appear as if it’s from the IRS.
How to stay safe: The IRS never initiates contact via phone calls. If you receive a suspicious call, hang up immediately and report it to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484.
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2. Phishing Emails Posing as the IRS
Scammers send fake emails pretending to be from the IRS, claiming you owe taxes, need to verify personal information, or qualify for a refund. These emails often contain malicious links or attachments designed to steal your data.
Red flags:
- Emails requesting personal or financial information.
- Poor grammar, spelling mistakes, or suspicious-looking sender addresses.
- Urgent messages threatening account suspension or legal action.
How to stay safe: The IRS never sends unsolicited emails about taxes, refunds, or audits. If you receive one, do not click any links—instead, forward it to [email protected] and delete it.
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3. Fake Tax Preparers Stealing Refunds
Some scammers pose as tax professionals, offering to file your taxes but instead stealing your refund or identity. They may promise large refunds or ask for a percentage of your return as payment.
Signs of a shady tax preparer:
- Refuses to sign the return or provide a Preparer Tax Identification Number (PTIN).
- Asks for personal login credentials to file electronically on your behalf.
- Promises guaranteed refunds before reviewing your tax information.
How to stay safe: Always use a verified, reputable tax preparer and check their credentials with the IRS Directory of Federal Tax Return Preparers before handing over any information.
4. Social Security Number (SSN) Tax Fraud
Scammers steal Social Security numbers to file fraudulent tax returns, claiming refunds before the real taxpayer files. Victims often discover this only when their legitimate return is rejected.
Warning signs:
- IRS notification that a tax return has already been filed in your name.
- Unexpected tax refund deposits or debt collection notices.
- Issues receiving government benefits due to “already claimed” status.
How to stay safe: File your taxes as early as possible to beat fraudsters to it. Additionally, consider placing an Identity Protection PIN (IP PIN) on your IRS account to prevent unauthorized filings.
5. Fake Tax Debt Relief Companies
Companies promising to settle your tax debt for “pennies on the dollar” often charge high fees and do little to help. Some simply take your money and disappear.
Red flags:
- Guarantees that your tax debt can be erased without reviewing your financial situation.
- Pressure to pay large upfront fees before any work is done.
- Claims of exclusive “insider” programs that the IRS doesn’t advertise.
How to stay safe: If you need legitimate tax relief, work directly with the IRS or a licensed tax professional who specializes in tax resolution. The IRS offers free assistance for qualifying taxpayers through its Taxpayer Advocate Service.
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Stay Vigilant This Tax Season
Scammers are getting more creative every year, but you don’t have to be their next victim. By recognizing the warning signs of IRS tax fraud and following best practices, you can keep your hard-earned money and personal information safe.
When in doubt, always contact the IRS directly through their official website (IRS.gov) instead of responding to unsolicited calls, emails, or messages. Stay informed, file early, and safeguard your financial future.
