Does this sound familiar? All I need is your social security number. Claim your free prize now! This investment is guaranteed to make money! These days, weve become familiar with many of the telltale signs of scams. But the criminals who perpetrate scams are becoming more sophisticated, and tax season is their open season. Each year, scammers defraud unsuspecting taxpayers out of thousands of hard-earned dollars. Fortunately, there are steps you can take to protect yourself and your family during tax season. If you know what to look for and if you exercise caution you can make sure you wont fall victim to tax scams.
In recent years, over 350,000 American taxpayers have been targeted by scammers. Fake IRS agents make phone calls to people of all income levels and backgrounds in nearly every state. They tell the target they owe money and demand immediate payment. Often, these calls are convincing: Scammers can manipulate caller ID to make it appear that they are calling from the IRS, and they sometimes know the last four digits of the taxpayers social security number. They may threaten jail time, loss of a business or drivers license or deportation if their demands are not met. Since 2013, scams like these have resulted in about $15.5 million in losses for taxpayers.1
Although tax scams can be crafty and deceitful, there are ways to determine if a communication from the IRS is legitimate. One thing to remember is this: The IRS will never call you to demand immediate payment, even if you owe back taxes. Additionally, scammers will often demand specific payment methods like prepaid debit cards or wire transfers, while the real IRS will never require you to use a specific method to pay your taxes. Other tips for protecting yourself:
- The IRS will never call you about taxes owed without first mailing you a notification;
- If you owe taxes, the IRS will never demand payment without first providing the opportunity to question or appeal the amount you owe;
- The IRS will never ask for credit or debit card numbers over the phone; and
- The IRS will never threaten to have you arrested for not paying your taxes.
If you receive a call from someone claiming to be from the IRS and asking you for money, heres what you should do:
- If you think you might owe back taxes, hang up and call the IRS at 1-800-829-1040; or
- If you know you dont owe taxes, report the incident to the Treasury Departments Inspector General for Tax Administration at 1-800-366-4484 or online at tigta.gov.2
By keeping these tips in mind, you can make sure you know whether a communication from the IRS is genuine. And by reporting any suspicious calls, youre not only protecting yourself and your family youre also protecting other taxpayers across the country. As always, if you have questions about tax scams or any other community issue, please feel free to contact my office at firstname.lastname@example.org or by calling (718) 385-3336.