Ready for January 23 – the 2017 date for the nation’s individual income tax filing season to officially open? With a closing date of April 18, 2017 taxpayers have plenty of time to file – but that means scammers have the same amount of time to swindle. These scams come in many forms, but generally fall under three categories: phishing, fraudulent returns, and phone scams.
Phishing Last year, the Internal Revenue Service (IRS) saw a 400% increase in phishing incidents revolving around income tax filing. Phishing is the practice of sending emails under the guise of a reputable source, in order to gain critical information. In these cases, that information would include Social Security numbers, names, passwords, filing status, and bank numbers.
These emails – and sometimes text messages – include a link that take users to a fake yet official-looking site where the information is entered. Once gained, this information can be used to help scammers file false reports. Often these websites contain malware, which infects computers and opens up the opportunity for thievery. An example the IRS saw last year and anticipate copy-cats of includes language that says, “Update your IRS e-file immediately” or “Update your e-file.” It is also crucial to remember the IRS does not email or call – their first official correspondence comes by “snail” mail.
Fraudulent returns A long-standing scam comes in the form of fraudulent returns. This occurs when thieves use the real information of unknowing Americans to file tax returns on their behalves. Many don’t realize this has happened until they go to file their actual return and get rejected by the IRS due to it already being “filed.” The IRS accepts only one return per U.S. Social Security number.
In 2016, this scam ran rampant. “IRS agents” place calls to Americans – typically targeting immigrants – claiming they owe outlandish amounts of money, and to wire it to the IRS as soon as possible or pay with a pre-loaded debit card. Generally, these “agents” threaten the victim with arrest, fines, suspension, or deportation.
With these – and all scams – it’s important to remember what the IRS DOES NOT do:
- Call demanding payment. The IRS contacts those who owe money via mail, and if that is ignored, will then began taking other measures.
- Demand you pay money without allowing people to question the reason or amount – or question at all.
- Ask for credit or debit card information over the phone or email.
- Threaten people with any form of violence of retribution.
Keeping an eye out for phishing and phone scams reduces the risk of any type of fraudulence. Knowing what to look for – i.e., the above – is the best form of defense.
These free resources should not be taken as tax or legal advice. Content provided is intended as general information. Tax regulations and laws change and the impact of laws can vary. Consult a tax advisor, CPA or lawyer for guidance on your specific situation.