Tax season is officially in swing, which means that it’s also the time of year when fake IRS scams abound. Typically, while scams affect millions of people each year, this year could be especially bad, thanks to the Equifax data breach.
If you remember, data containing more than 143 million people’s names, addresses and Social Security numbers—all information that would be needed to file a tax return—was stolen by cyber criminals back in mid-2017. That’s why experts recommend that taxpayers be especially vigilant this year and keep an eye out for tax fraud and identity theft.
Here are seven IRS and tax scams to watch out for in 2018 as well as tips on how to avoid becoming a victim of one.
2018 IRS And Tax Scams To Be Aware Of
1. Tax Refund Theft
Data breaches have left many people vulnerable to identity theft in 2018. By filing a fraudulent tax returns with stolen information, scammers are able to have your refund deposited directly into their account.
Although you have until April 17 to finish your taxes, it might be a good idea to file your tax return as early as possible, especially if you are expecting a refund. The IRS rejects any tax returns that are filed more than once, so you could potentially beat an identity thief to the punch by filing first.
If your W-2s contain the new 16-digit identifier codes, be sure to input those numbers into your tax return as well. This will help let the IRS know that your return is a legitimate one.
2. Tax Refund Error Scam
The IRS has reported that it’s already received a number of bogus tax returns this year. However, in a new twist, some of these returns actually contained the correct bank information for the taxpayer whose information was stolen. Once the refunds were deposited, the scammer would then call the taxpayer, pretending to be a debt collector or an IRS agent. He or she would claim that the refund was issued in error and that the victim needed to forward the funds to them instead. The scammer may even threaten the tax payer with criminal charges if they don’t comply.
Be aware: the IRS will never call you out of the blue to demand payment, so if you receive a call like this, it’s best to hang up immediate.
3. Fake Tax Preparer Websites
According to the Better Business Bureau, cyber criminals have set up fake websites to impersonate legitimate tax preparation companies. So if you plan to use a service like Intuit’s TurboTax or H&R Block, make sure you navigate to their website by typing their URL directly into your internet browser. Never click on a link in an email you receive even if it looks real.
4. Return Preparer Fraud
When it comes to choosing a tax preparer, make sure to research them thoroughly and never sign a blank tax return, even if the person doing your taxes is someone you know. The IRS reports that dishonest tax preparers set up shop every year in order to scam their customers.
5. W-2 Email Phishing Scam
If you work in an HR or payroll department, then you will want to pay special attention to this scam. Criminals are targeting professionals who work in these fields by emailing them from accounts that appear to come from CEOs and other business executives at the companies these HR and payroll pros work for. The emails request lists of personal information about employees, including Social Security numbers. Once this information is obtained, the thieves can then use it to file stolen tax returns.
If you work in these professions, be wary of any such requests and confirm in person or by phone if possible, before turning over any sensitive info to your colleagues.
6. Client Email Phishing Scam
Likewise, if you’re a tax professional, you need to be on guard for phishing emails that come from cloud-based storage providers, asking you to reset your password. Once criminals have obtained a tax professional’s login information, they use it to gain access to lists of client email addresses. Then, the scammer will send out an email with a fake IRS form, asking the clients to provide their personal information urgently. They will later use to withdrawal money from the victim’s accounts or take out a loan.
7. Fake Refund Email Phishing Scam
If the “IRS” sends you an email asking you for more information before they can deposit your refund, delete it right away. No matter how real the email may seem, the IRS says it will never initiate communication with a taxpayer by email about money matters.
For more information on common taxpayer scams, visit IRS.gov’s list of consumer alerts.