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Financial Literacy: IRS and Tax Scams

Identity Theft

Identity theft tops the yearly “ Dirty Dozen ” of tax scams year after year. Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Taxpayers need to guard against any ploy to steal personal information through phishing, phone scams, and lax data security.

Phone Scams

Your tax identity and return is not safe simply because April 15th is behind you. Many consumers have notified the Office of Consumer Protection of calls received from various telephone numbers purporting to be IRS agents. These so-called agents will then tell the consumers that they owe the IRS money and demand payment over the telephone or by wire transfer or gift cards. The IRS will never call you on your return and demand money this way . If you get this false call, record the telephone number and any other information and report it to the Treasury Inspector General for Tax Administration through its online reporting form or at 1-800-366-4484.

Phishing

Taxpayers need to be on guard against fake emails or websites looking to steal personal information. The IRS will never send taxpayers an email about a bill or refund out of the blue. Don’t click on one claiming to be from the IRS. Be wary of strange emails and websites that may be nothing more than scams to steal personal information.

Relatedly, the Internal Revenue Service issued an alert advising tax professionals of a phishing email scam. This scam pretends to be from tax software companies providing links for software update. The fraudsters attempt to use this bogus link as a means of obtaining sensitive information such as passwords, Social Security numbers or credit card numbers or to make unnecessary payments by recording keystrokes and other information.

Back-to-School Scams

The Internal Revenue Service also warns taxpayers about telephone scammers targeting students and parents during the back-to-school season and demanding payments for non-existent taxes, such as the “Federal Student Tax.” People should be on the lookout for IRS impersonators calling students and demanding that they wire money immediately to pay a fake “federal student tax.” If the person does not comply, the scammer becomes aggressive and threatens to report the student to the police to be arrested.

The IRS will never--

• Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will  first mail you a bill if  you owe any taxes (sometimes they do it when you don’t owe and that’s a mess).
• Threaten to immediately bring in local police or other law enforcement groups to have you arrested for not paying.
• Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe. 
• Ask for credit or debit card numbers over the phone.

For more information about tax scams visit the IRS' Consumer Alerts page. 

If you get a suspicious phone call from someone claiming to be from the IRS and asking for money--

•  Hang up immediately.
•  Contact the U.S. Treasury Inspector General for Tax Administration to report the call. Use their “ IRS Impersonation Scam Reporting ” web page or call 800-366-4484.
•  Report it to the Federal Trade Commission. Use the “ FTC Complaint Assistant ” on FTC.gov .