How to Protect Yourself from Tax Scams

Tax season is in full swing. Whether you file your returns yourself, with the help of a professional or tax filing software, it is important to remain vigilant of potential scams.

The Federal Trade Commission (FTC) reported consumers lost nearly $8.8 billion to fraud in 2022, with imposter scams accounting for $2.6 billion of those reported losses.

Here are tips to help keep yourself and your finances secure.

How Some Common Tax Scams Work

• Impersonating the IRS: Scammers are known to impersonate the Internal Revenue Service (IRS) and other government agencies for their schemes and can even spoof legitimate phone numbers. If you receive a message or call that you were not expecting, delete the message without clicking any links or downloading attachments or hang up the phone. Scammers will pressure you to act urgently without thinking, so be wary of red flags like threatening language. Scammers also often threaten that your Social Security number will be canceled or suspended, which is not something that can be done by any government agency.
• Impersonating Tax Professionals: It is important to only work with properly credentialed tax professionals and legitimate tax preparation websites. Anyone who is paid to help file your taxes is required by law to have a valid Preparer Tax Identification Number (PTIN). This number and their signature must be included on the tax return. If they won’t sign or provide their PTIN, you’re being scammed.
• Impersonating New Clients: Tax professionals also need to be vigilant, as scammers have been known to pretend to be potential new clients. Scammers will use links and attachments to infect the tax professionals’ devices with viruses and malware to gain access to their databases and more. Scammers may also use the company’s systems to file fake returns.
• Asking for Payment: Whether someone is claiming to be your tax professional, from the IRS or another government agency or company, asking for payment via gift card, cryptocurrency or wire transfer is a red flag. Government agencies will never ask for payments via these methods.

How to Protect Yourself

• Know How You’ll Be Contacted: The IRS will not initiate contact with you via email, text or social media. If you owe taxes, the IRS will first contact you by mail. They will also only call you if you’ve scheduled an appointment.
• Research First: It is important to always do your research before working with any professional, website or software. Ask loved ones and trusted friends for recommendations, and be cautious where you seek advice from, including from social media. Not all advice is created equal, and the IRS has previously reported about social media posts that can encourage consumers to file false or misleading returns in hopes of receiving a refund.
• When in Doubt, Close it Out: If a message or call seems suspicious, delete it without clicking any links or hang up and contact the agency directly using the number from their official website.

If You’ve Been a Victim

• Immediately file a report with the IRS, a police report as well as a report with the FTC at https://reportfraud.ftc.gov.
• Contact the Social Security Administration if your Social Security number was compromised.
• Get new bank accounts, numbers and debit/credit cards from your financial institutions and have a stop payment placed on your accounts.
• Place a fraud alert on your credit reports with Equifax, Experian and TransUnion.
• Update your usernames and passwords for any online accounts. This should be done regularly for added security. When possible, use two factor authentication for online accounts.
• Have any compromised devices professionally cleaned of viruses and malware.

For additional information on common tax scams, you can check out: https://www.irs.gov/newsroom/tax-scamsconsumer-alerts.

Many consumers look forward to their potential tax refund this time of year. With the right vigilance, you can ensure you get your taxes filed safely and properly.