While scammers work year-round to steal money and sensitive personal information from unsuspecting individuals, their schemes become more prevalent during tax season. Here, we answer some common questions related to tax scams to help you keep your information safe.
How can I ensure I’m working with a legitimate tax preparer?
Before you hire someone to do your taxes, do some research. This includes reviewing the tax preparer’s fees, checking for special designations or memberships, and asking for references from previous clients. Also, ask to see their Preparer Tax Identification Number, a requirement for individuals who prepare or assist in preparing federal tax returns for compensation. If they won’t share it with you, you’re talking to a scammer. Other red flags include asking you to sign a blank form or refusing to sign your form.
What are some warning signs of tax-related identity theft?
The IRS defines tax-related identity theft as stolen personal information being used to file a tax return and claim a fraudulent refund. Everyone is at risk, so keep the following warning signs from the IRS in mind.
- You get a letter from the IRS inquiring about a suspicious tax return that you did not file.
- You can’t e-file your tax return because of a duplicate Social Security number.
- You get a tax transcript in the mail that you did not request.
- You get an IRS notice that an online account has been created in your name.
- You get an IRS notice that your existing online account has been accessed or disabled when you took no action.
- You get an IRS notice that you owe additional tax or refund offset, or that you have had collection actions taken against you for a year you did not file a tax return.
- IRS records indicate you received wages or other income from an employer you didn’t work for.
- You’ve been assigned an Employer Identification Number but you did not request an EIN.
Avoid tax-related identity theft by keeping your Social Security number or tax identification number in a secure location. Always be skeptical of requests for this sensitive information. Also, keep your home computer’s security software up to date and run updates on connected devices regularly.
What scams should I look out for during tax season?
IRS impersonation scams are common. Fraudsters may reach out via email, text message or phone call to steal sensitive personal information. It’s important to remember that if the IRS needs to reach you, they will first reach out by mail. The IRS will never call to demand immediate payment by prepaid debit card, gift card or wire transfer, or threaten taxpayers with arrest. If you receive an email, text message or phone call from someone claiming to be from the IRS, do not give them any information or click on any links.
If you suspect you have been in contact with a scammer, report it directly to the IRS. Additionally, file a complaint with the Federal Trade Commission so the information is available to investigators.