Have you recently received an IRS call giving a “final notice” about a lawsuit? Unfortunately, throughout 2020, the number of tax-related scams increased by 75% alone—a staggering amount only accelerated by the Economic Impact Payments (EIPs) launch. While some of these scams are avoidable, not all of them are obvious. To help you with that, we’ve compiled a list of tips and tricks to stay clear of scams.
The IRS Doesn’t Text People.
One of the most significant indicators of a scam is the way they’re communicating with you. The IRS will almost always initiate contact through the U.S. Postal Service. In cases with outstanding payments that taxpayers have already received notice of, the IRS may also follow up via phone calls or an unannounced house visit. They will never demand immediate payment or a personal transfer—the IRS only accepts payments to the U.S. Treasury.
So, if you’re receiving a suspicious email, text, or call from the IRS demanding payment or to access a link, don’t! These are scams that you can avoid. If you’re ever unsure of your case or are the victim of a scam, reach out to the IRS’s toll-free number at 1-800-829-1040; they can help validate your current status or help report scams.
(Psst … worried about what happens for late tax payments? Check out our earlier blog post on the topic!)
Things to Watch Out For
70-year-old Dan Smith has recently been served a final notice about his outstanding payments. The email indicates that if he fails to pay by the end of the day, the IRS will sue him—and that an iTunes gift card is a valid form of payment. You might be thinking right now, “This is an obvious scam!”—but Dan, who’s not tech-savvy, doesn’t know any better. Alarmed, he quickly purchases a $100 iTunes gift card and clicks on the link, where he inputs the gift card code.
While Dan’s relieved he won’t be subject to a lawsuit from the IRS, this opens him to further scams for the future. Using him as an example, here are some key points to watch out for regarding IRS scams.
Urgency. Scammers want to instill fear in their victims, putting them in urgent situations where they are pressured to pay or share sensitive information immediately. The IRS will never intimidate you into paying a bill over a call, ask for your SSN, allow payment through gift cards, or seek a refund.
Opening links. Scammers send these messages out en-masse. When these links are opened, it tells them that the email address or phone number is legitimate! This puts them on a list for future scams.
Alternative forms of payment. The IRS only accepts payments to the U.S. Treasury. Under no circumstances will they request payment in the form of gift cards or donations—and never to an individual agent’s account.
The Dirty Dozen: What Are They?
The IRS compiles an annual report of the worst tax scams—known as the Dirty Dozen. While the specific scams change every year, they all try to coerce taxpayers into making a payment, opening links, or sharing sensitive information. Here are some common ones:
- Phishing. Fake emails or websites will disguise as a government site and request your personal information, like an SSN, bank account number, personal logins, or more.
- Threatening impersonator calls. Scammers will impersonate an IRS agent, threatening taxpayers to make outstanding payments over the call—failure to comply results in a “lawsuit” or “police visit.”
- Social media scams. Scammers will impersonate family members, friends, or co-workers on social media or emails, requesting to open a link or send some form of payment.
- Senior fraud. Senior citizens, who are usually not tech-savvy, are targeted by scammers over social media, email, texts, or other virtual platforms for payments. This can include impersonating close family members or simply disguising it as a charity in need of support.
- Child tax credit scam. Scammers impersonate government agents to contact families eligible for child tax credits, helping them “confirm” sensitive information to be qualified. Since their 2019/2020 tax returns automatically determine qualified families, there is no need for taxpayers to take additional steps.
Need Professional Advice?
Want to learn about your rights as a taxpayer or need advice on how to navigate your taxes? Our team can help with that—just reach out!