Tax season can be a stressful enough without needing to worry about recovering from tax-time scams. Here’s what to look for and how to protect yourself.
With each new tax season comes a new group of scammers trying to get money and information from you.
This year, the Internal Revenue Service (IRS) is warning consumers of these scams in particular.
If you’re having someone else prepare your taxes this year, be sure to double-check all the information before filing. The IRS is warning of “ghost preparers” who falsify information, promise higher returns by faking income, and add deductions you normally wouldn’t qualify for, then refuse to sign for their work or include the required Preparer Tax Identification Number (PTIN) on a return. Additionally, these tax preparers might require a cash payment or will direct deposit refunds to their own account instead of that of the taxpayer.
Ultimately, the taxpayer is responsible for all information on a return, so be sure to review all the information against your records. If you see anything unusual, report the preparer and file a complaint with the IRS.
“Tax Transcript” Email Scam
Scammers are posing as financial institutions or “IRS Online” and sending documents via email with “Tax Account Transcript” as the subject line or document title. When the recipient opens the email or attachment, malware can spread. A breach like this can be especially harmful for businesses.
The IRS won’t send unsolicited emails, especially with sensitive information or documents. Avoid opening the email, but if you do so accidentally, forward the scam email to [email protected].
Tax Refund Scam
The tax refund scam involves thieves phishing or infecting computers to gain access to tax return data for thousands of filers. They then use this information to file refund claims on behalf of the victim.
Once the refund has been deposited or a check has been sent, the scammer poses as an IRS or collection agent and reaches out to the victim (usually by phone) to demand the money be returned. They may also use recorded calls to threaten the victims into returning the funds.
If you think you’re a victim of this particular scam, it’s important to act quickly.
If you receive an unexpected tax refund via direct deposit:
- Immediately call us 512.302.6800 or your financial institution to have the funds returned to the IRS and to close or flag the account due to fraud
- Call the IRS at 800.829.1040 to let them know why the refund is being returned
If you receive a paper check and have NOT cashed it:
- Write VOID in the endorsement section on the back of the check
- Include a note with your returned check stating “Return of erroneous refund check because (give brief explanation of the reason for returning the refund check).”
- Submit the check to the appropriate IRS location (look at the bottom text line in front of the words “TAX REFUND” on your refund check)
If you receive a paper check and have cashed it:
- Write a check, money order, etc. and send to the appropriate IRS location
- If you no longer have access to a copy of the check, call the IRS at 800.829.1040 and explain to the IRS assistor that you need instructions on how to repay a cashed refund check
- Write on the check/money order: Payment of Erroneous Refund, the tax period for which the refund was issued, and your taxpayer identification number
- Include a brief description as to why you are returning the refund
Threatening Calls & Emails
This involves scammers calling consumers pretending to be IRS or collection agents. They call demanding immediate payment for a supposed tax bill and usually ask for a specific payment method, such as prepaid debit cards, gift cards, or wire transfer.
They’re also sending emails to personal and business accounts claiming to be the IRS. The email will ask you to click an attachment or link and then will install malicious software.
It’s important to remember that the IRS does not initiate contact with taxpayers via email, text, or social media. They also won’t call to demand immediate payment, or threaten to bring in police or other law enforcement to have you arrested.
If you think you are a victim of tax-related identity theft, click here for tips from the IRS on determining if it’s really them, recommendations, and steps to take.