Avoiding Tax Season Scams

The majority of data thefts begin with an email phishing scam. As we get closer to the filing deadline, taxpayers should be extra cautious about any emails, text messages, or phone calls they receive from someone claiming to be an IRS employee. In this article, we’ll explain the tell-tale signs of a phishing scam, cover the most common tax season scams, and show you where to get help if you are a victim or attempted victim of a tax scam.

Don’t Take the Bait: How to Detect Phishing Scams

Here are the red flags to watch out for:

• A direct request, in email or over the phone, for your personally identifying, financial, and other sensitive information.
• A sense of urgency, such as a problem with your account or an overdue tax bill.
• Threats about what will happen if you don’t immediately provide the requested information or payment.
• Call to action to open an attachment or click on a link, which may download malware onto your computer or take you to a site that resembles a valid business but is actually a scam designed to steal your login or information.

Top 10 Tax Season Scams to Watch Out For

The IRS keeps a current list of tax scams/consumer alerts on its website. We include many of those, as well as evergreen scams you can expect to see any time of year.

Fake IRS Form W-8BEN

In this scam, international taxpayers and non-resident aliens receive a counterfeit Form W-8BEN, which is the Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting. An accompanying letter claims that, although you don’t have to withhold or report income tax, you need to authenticate your information.

Last-Minute Phishing Emails

Beware of scam messages near the filing deadline that ask you to update your online account.

Federal Student Tax

Scammers target students with a bogus tax, calling to say you must wire money immediately to avoid being reported to the police.

Tax Payments via iTunes Gift Cards

Beware of any request to make tax payments with an iTunes or other types of gift cards.

Social Security Numbers

The latest twist on this scam is a threat to suspend or cancel your SSN in order to scare you into returning the voicemail.

Natural Disasters

Scammers impersonating the IRS will call and try to persuade you to donate to a supposed charity supporting people.

Email Impersonation

Scammers have become more sophisticated in email campaigns to impersonate the IRS in emails to try and obtain your personal or financial information.

Phone Impersonation

Just because the Caller ID appears to show the Taxpayer Advocate Service doesn’t mean it’s legitimate. Be cautious and remember that the IRS will never request personal or financial information from you over the phone or through digital communication channels.

“Ghost” Preparers

Beware of unethical tax return preparers, who charge a fee or percentage of your promised refund but never sign the return. When you try to return with a question, they’ve disappeared. Legitimate preparers should be able to show you a valid Preparer Tax Identification Number.

“Tax Transcript” Emails

Beware of emails purportedly from the IRS that prompt you to open a tax transcript attachment. You could actually be opening malware.

What to do if you suspect a tax scam

First of all, it’s important to remember that the IRS will never:

• Demand immediate payment over the phone.
• Call about taxes owed without first mailing you a bill.
• Threaten you with arrest for not paying.
• Demand your tax payment without an opportunity to question or appeal the amount owed.
• Require you to use a prepaid debit card or other specific payment methods for your taxes.
• Ask for credit or debit card numbers.

If you get a suspicious phone call with some of these red flags, here’s what you should do:

• Don’t provide any information. Hang up immediately.
• Contact TIGTA to report the call. Use their IRS Impersonation Scam Reporting web page or call 800-366-4484.
• Report it to the Federal Trade Commission by visiting FTC.gov and clicking on “File a Consumer Complaint.” Please add “IRS Telephone Scam” in the notes.
• If you think you might owe taxes, call the IRS directly at 1-800-829-1040.

Let us help you have a safe and stress-free tax season!

At Town and Country Bank and Peoples Prosperity Bank, we want your tax season to be as safe and easy as possible. Read our Sprig the Word blog for more articles on cybersecurity and contact us if you have any questions or concerns about your own account(s).