Tax Scams 2020

With tax season in full swing, scammers are looking for new victims. These criminals continue to look for new ways to trick taxpayers. In fact, these scams are so prevalent that the IRS has a page of its website devoted to consumer alerts to inform taxpayers of the latest versions. Fortunately, you don’t have to fall prey to criminal activity. Here are a few scams the IRS warns about:  

Fraudulent Calls and Emails

  • IRS Phone Scams

There are many versions of IRS phone scams, and at first glance they may seem legitimate. Sophisticated scammers will alter caller ID listings and provide fake IRS badge numbers to unsuspecting victims. In many instances the scammers already have a lot of the taxpayers’ personal information, including the last four digits of their social security numbers. In these “urgent” phone calls, criminals attempt to convince taxpayers that they owe taxes that must be paid immediately by wire transfer or gift cards. Sometimes, victims are told they will receive a refund and they must provide personal information or that they must pay or risk arrest or deportation. The IRS advises to just ignore these types of calls, and to remember that they will not ask for payment by phone.

  • Calls from Taxpayer Advocate Service

Another version of phone scams involves a fraudulent call from Taxpayer Advocate Service (TAS), an independent organization within the IRS.  The callers again may provide fake ID badges and alter caller ID so the calls appear to originate from TAS offices. Once again, the criminals will demand personal information over the phone. The TAS does exist to help taxpayers who need assistance, but the IRS reminds taxpayers that they will not make unsolicited phone calls.

  • Phishing Emails

These fake emails are nothing new, but they do continue to become more elaborate. These unsolicited emails often appear legitimate and even include government seals and official-sounding language, but instead they are tools for criminals to access personal information or infect computers with malware. Again, the IRS reminds taxpayers that they will not ask for personal information via email. If you suspect you have received a phishing email, you can report it to the IRS via their website.

Natural Disaster Scams

This scam preys on well-meaning individuals by taking advantage of their generosity. Criminals initiate unsolicited phone calls, emails, social media messages, in-person visits or other contact with taxpayers who wish to help victims of natural disasters. They then solicit funds under the guise of charitable donations. There are a few different versions of this scam. The criminals may impersonate charities, make fake websites, or operate fake charities. Sometimes they also claim to collect donations on behalf of the IRS. To avoid these types of scams, the IRS suggests confirming the legitimacy of a charitable donation by visiting the Tax Exemption Organization Search on IRS.gov. It’s also important to pay by credit card, not cash or check. Never give out personal information to anyone soliciting a donation.

Canceled Social Security Number

In the most recent version of the social security number scam, taxpayers receive a call from scammers who threaten to suspend or cancel the taxpayer’s social security number due to an unpaid tax bill. If you receive one of these calls, the IRS suggest hanging up. Social security numbers can’t be canceled and the IRS will never ask for personal information by phone. 

Fake Tax Preparers

Some tax preparers are not who they claim to be. These “ghost” preparers use unethical tactics to make money from unsuspecting taxpayers.  Instead of preparing taxes and sending to the IRS, they use a variety of unscrupulous tactics. Some of those include charging a percentage based on the refund amount, requiring cash payment without a receipt, reporting false income to claim additional deductions, or even re-routing refunds to their personal accounts.  The IRS urges all taxpayers to carefully review returns and check bank account and routing numbers carefully before submitting. Additionally, be sure to use a legitimate tax preparer, such as the professionals at BSB.

Here are a few reminders from the IRS to help you stay protected from tax scams this season:  

  • The IRS never asks for personal information via email, text, or social media.
  • The IRS always contacts via letter first. Confirm letters by calling the phone number listed on IRS.gov, not on the potentially fraudulent letter.
  • The IRS does not demand immediate payment or surprise payments
  • The IRS and other government agencies do not accept payments made by gift cards.
  • The IRS does not threaten to bring in law enforcement due to non-payment.
  • The IRS does not demand payment without a chance to question the amount owed.

For more information about tax scams, visit irs.gov. To avoid the risk of fraudulent tax preparers or other schemes, make sure you are working with a trustworthy tax provider. The professionals at BSB are here to answer questions and assist you with all your tax needs.