Tax season often takes on a different meaning for identity thieves as they hope to score easy money by victimizing taxpayers and stealing personal information. Recently, the IRS released its “dirty dozen” list of tax scams for this year’s tax season, serving as a warning for consumers before they lose their money — or even worse their identities — to scammers. However, taxpayers have the power to fight back against these schemers, which could help other consumers avoid becoming victims.
Here are three top tax-related scams and how to fight against them:
The scam: Around tax season, taxpayers could receive phone calls from charities hoping to receive donations, which are tax deductible. However, the IRS warns that this could be a scheme designed to steal personal information that consumers use to prepare their taxes.
How to foil scammers: IRS Commissioner John Koskinen cautions taxpayers to check to make sure these charities are actually legitimate before donating. The IRS website features tools, including the Exempt Organizations Select Check, to determine the status of charitable organizations, such as their eligibility to receive tax-deductible contributions.
IRS Impersonation Scam
The scam: In another scam, schemers prey on people’s fears rather than their desire to help others. The scam begins with a consumer receiving a call from an alleged IRS official, claiming that he or she owes money and could be thrown in jail if he or she doesn’t pay up. The scammers may also leave messages requesting that consumers call back immediately, according to the IRS. The identity thieves usually request the payment via prepaid debit card or wire transfer.
How to foil scammers: IRS officials tend not to contact consumers by phone. Rather the agency sends notifications to them by official mail. They will also not request payment through a wire service, which is almost untraceable. If taxpayers receive a similar call, they should not give out any personal information and should send a report to the Treasury Inspector General for Tax Administration. The form requests information to determine the origin of the scam and whether there was financial loss involved.
The scam: Consumers receive an email from either USA.gov or IRS.gov requesting they update their IRS e-file. There is a link to a fake site to “update” this information.
How to foil scammers: Do not open any links to the email as they are not from the IRS. Rather than answer, forward the email to firstname.lastname@example.org and learn more about phishing scams at the IRS’s Report Phishing website.
If you’re worried you may have already compromised your identity by falling for one of these tax scams, you may want to monitor your credit to make sure your information isn’t used to commit new-account fraud. You can pull your credit reports (here’s how to get your free annual credit reports) and you can also check your credit scores for free every month on Credit.com for any unexpected changes, which could be a sign of identity theft.
More on Income Tax:
- How to Protect Yourself from Taxpayer Identity Theft
- Do Unpaid Taxes Affect Your Credit Report?
- Do Taxes Affect Your Credit Score?