During the first few months of each year, as April 15th looms, many people are concerned about the requirements for filing their annual federal and state income tax returns. The tax filing process can be stressful, and many taxpayers may be worried about whether they will owe taxes or whether they may face penalties if they provide the wrong information to the Internal Revenue Service (IRS). Unfortunately, this provides scammers with the opportunity to target people and attempt to steal their money or personal information. Those who have been affected by these types of scams can consult with an attorney who understands legal issues related to cybersecurity.
Common Tax-Related Scams
Scammers may use a number of different methods of contacting people, convincing them that they owe money, or asking them to disclose personal information that may be used to commit identity theft. These methods include:
Unsolicited phone calls – Scammers may call people claiming to be from the IRS and demanding payment for taxes or penalties. These calls can often be threatening, and a scammer may claim that a person will be arrested, their bank accounts seized, their driver’s license will be revoked, or they will face other consequences. It is important to understand that the IRS does not make unsolicited phone calls to taxpayers. The IRS typically contact people by mail first before using any other methods. The IRS also does not accept payments through gift cards, prepaid credit cards, wire transfers, or cash sent through the mail.
Emails that appear to be from the IRS – Taxpayers may receive emails that appear to be legitimately asking them to log in to a website to confirm their tax return or other information. When a person clicks the links in these emails, malware may be installed on their computer, or a website may seek to capture personal information such as their Social Security number. Taxpayers should note that the IRS does not send emails about tax returns or the status of tax refunds.
Fake charities – While taxpayers may be able to claim tax deductions by donating to charity, scammers may attempt to take advantage of people by soliciting donations for causes related to the COVID-19 pandemic, natural disasters, or other emergencies that have been in the news. To claim a deduction, donations must be made to a legitimate charity. Taxpayers should confirm information about a charity, and they should make sure payments are made through accepted methods, such as credit cards or checks rather than sending gift cards or wiring money.
“Ghost” tax preparers – Persons purporting to be legitimate tax preparers may take a number of actions meant to defraud taxpayers, such as having tax refunds sent to their own accounts rather than to the taxpayer’s account. Tax return preparers must sign tax returns and include their Preparer Tax Identification Number (PTIN). Preparers who refuse to do so are likely attempting to scam taxpayers.
The official government links in the Sources section at the end of this article describe in greater detail the types of scams, how to identify them and what you should do if you are approached.