How to Avoid IRS Tax Scams

Many of us have gotten the call: It’s the IRS on the line, and you might be in big trouble if you don’t do what they say now. It can be very convincing. But think twice before handing over personal information like your address, birthdate or Social Security Number (SSN) to resolve the issue. Chances are it’s a scam artist, not the IRS, on the other end of the line.

These scams are rampant. In 2018, the IRS reported it had rejected or suspended 2.8 million suspicious tax returns and stopped $16.6 billion in fraudulent returns, according to the U.S. Treasury Department.

Tax scams range from phone calls asking victims for “missing” SSNs (which fraudsters use to open credit card accounts) to sending fake tax bills and demanding payment. Scammers will reach out via email, postal mail, phone and even social media to lure victims into giving up personal details or opening their pocketbooks. Each year, the IRS shares its “Dirty Dozen” list on how scammers work. Make sure to check it out before filing your next return, and in the meantime follow these tips to avoid falling victim to tax scams.  

6 Tips to Avoid Tax Scams

1. Hang Up the Phone and Delete Emails

   No one wants to be on the wrong side of the IRS, but it’s OK to hang up the phone if an “IRS representative” makes threats after you refuse to hand over information. This tax scam is easy to fall victim to because scammers typically use real people to handle conversations, instead of robocalls. The IRS does not phone or email taxpayers; official notifications are always sent through the mail. All other methods of communication should be treated as spam. 

2. Go Through Official Channels

   Emails can open you up to phishing scams — another common IRS tax scam. Ignore emails with links to check the status of your refund, which could lead to a computer virus, and go to the IRS website instead. The Where’s My Refund? tool is a safe way to determine when a check will arrive. Your accountant can review your return to see if information, like a signature, is missing.

3. Protect Your Personal Information

   Don’t make it easy for tax scammers to access your personal information. Shred any documents with your address, birthdate or SSN; and use strong passwords for online accounts. To combat tax scams, the IRS created stronger standards for online tax programs, including passwords with eight-plus characters and a combination of upper- and lower-case letters, numbers and special characters. 

4. Be on Alert

   Avoiding tax scams starts with being aware of red flags from the start. Website addresses that don’t match a website name, for example, are warning signs of fraud. Common sense should also prevail: Scammers who insist that tax debts be settled immediately with a prepaid debit card or iTunes gift card should be ignored. The IRS never demands immediate payment and never requires specific methods of payment.

5. Don’t Fall for Big Promises

   The tax code is ironclad, so promises of larger refunds, tax shelters and overseas accounts to avoid tax debt should be immediate warning signs of a scam. Fraudsters will make wild promises to get you to hand over your SSN, account numbers and other information that can be used to steal your identity or access your bank accounts. Complex tax avoidance schemes may also be illegal.

6. Report Fraud

If you receive questionable emails, phone calls or social media messages or fall victim to a tax scam, file a report with the IRS as soon as possible. The IRS also posts information about known scams on its website; check it out to learn more about what to watch for. The more informed you are, the less likely you’ll fall victim to a tax scam.

Protect Your Identity

Discuss Identity Theft Protection with your Farm Bureau agent to make identity theft clean up a little easier if you do fall victim to fraud scams.