4 Ways to Identify a Tax Scam

Tax filing season is a big time of year for scammers. Fraud schemes range from debt collectors claiming you haven’t paid your taxes, to someone posing as an IRS official or law enforcement agency threatening arrest, suspension of your driver’s license or some other penalty if you don’t immediately wire funds to pay your taxes. The scams have become increasingly sophisticated and hard to detect.

HERE IS WHAT YOU NEED TO KNOW:

The first contact from the IRS will be through regular mail delivered by the United States Postal Service. The IRS does not initiate contact with taxpayers by email, text message or social media. Only after mailing an official notification of an audit can an auditor/tax examiner follow up by phone. Forward any suspicious emails to the IRS at phishing@irs.gov. Alleged IRS or tax-debt collection calls should be reported to (800) 366-4484. 

Payments to the IRS are only payable to the United State Treasury. They do not accept payment in the form of prepaid debit cards, gift cards or wire transfers. IRS agents will NEVER demand that you pay taxes without giving you the opportunity to question or dispute the amount they say you owe. They have to advise you of your rights as a taxpayer. They cannot threaten to bring in local police, immigration officers or law enforcement to have you arrested for not paying your taxes. The IRS also has zero authority to revoke your driver’s license, business license or immigration status.

If an IRS representative calls or comes to your home or business unannounced to collect a tax debt or as part of an investigation, they will always provide two forms of official credentials: a pocket commission and an HSPD-12 card. You have a right to see the credentials and can call the IRS to verify the identity/information on the representative’s HSPD-12 card. 

Use a reputable tax preparer.  Make sure you verify credentials and references before you hire a preparer. Red flags include charging fees based on the value of your refund, requiring refunds to be deposited into their bank account (or open a temporary account), or writing you a check in advance and stating your tax filing is complete. Beware of claims that you can get a larger refund than normal as this may involve falsifying your return. 

To report tax-related illegal activities, contact the Treasury Inspector for Tax Administration at 800-366-4484. Unsolicited email claiming to be from the IRS, or from a related component such as EFTPS, should be reported to the IRS at phishing@irs.gov.

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