Tax Scams are Back: Read Before You File
As war in the Middle East rages and we prepare for higher energy and food prices, there’s another pernicious threat that requires our attention: tax scams. The IRS recently announced the “Dirty Dozen,” the agency’s annual list of the latest scams that threaten taxpayers. From AI-powered phone impersonators to social media tax “hacks,” it’s time to be on alert.
I like to think of this as defensive driving for tax season. Your first line of defense is knowing how the IRS does and does not communicate. The agency is old school, meaning it generally uses the USPS. The IRS will never call to demand immediate payment via gift card or wire transfer, threaten arrest, ask for card numbers over the phone, or contact you by email, text, or social media about your personal tax information. If you get a call, DM, email, or text claiming to be the IRS, treat it as a red flag. Artificial intelligence has made these scams more convincing than ever, criminals now generate realistic phishing emails, spoofed phone numbers, and voice-mimicking robocalls. When in doubt, hang up/delete and go directly to IRS.gov.
With that knowledge, here are some of this year’s most prevalent scams, and how to protect yourself against them.
Income Tax Identity Theft: This one has been around for a while and continues to be a thorn in taxpayers’ sides. Here’s how it works. A criminal steals your Social Security number, files a fraudulent tax return claiming a refund or credit, and diverts the money into an account in their own name. The scary part is that you may not discover the issue until the IRS rejects your legitimate return!
Resolving the situation can delay refunds for months. To prevent it, follow a few rules of thumb: Do not share your Social Security number, submit your return in a timely fashion, and consider an Identity Protection (IP) PIN issued by the IRS, which helps prevent someone else from filing a tax return using your Social Security number. The fastest way to receive an IP PIN is to request one through your IRS.gov online account. If you don’t already have an account on IRS.gov, you must register to validate your identity.
Phishing and Smishing: Scammers send alarming messages with fake QR codes directing you to fraudulent IRS websites. Never click unsolicited links, some install malware or ransomware on your device.
AI Phone Scams: Robocalls with spoofed caller ID use voice mimicry to sound legitimate. The IRS does not leave threatening voicemails or call demanding immediate payment.
Ghost Tax Preparers: While the vast majority of tax preparers are legitimate professionals, the IRS has seen an uptick in “ghost preparers” who refuse to sign returns and unscrupulous ones who vanish after filing, leaving you liable for any errors. Before sharing your most sensitive financial information, verify credentials at the IRS Directory of Federal Tax Return Preparers. Be wary of anyone promising a big payday or who won't sign your return.
Social Media Tax “Hacks”: The IRS continues to flag social media misinformation as a major driver of tax scams. Viral “tax hacks” often push people to file returns with false information or claim credits they don't qualify for. The consequences can include refund delays, audits, penalties, or worse. If it sounds too good to be true, it is!
If you have been (or think that you have been) a victim of fraud, the IRS recommends the following options for reporting:
For suspected IRS-related phishing emails or messages, phishing@irs.gov.
If you think your tax identity has been compromised, visit IRS.gov/idtheft
For suspected tax fraud, scams, identity theft, or other tax-related wrongdoing go to IRS.gov/SubmitATip. This is a new online too, which allows anyone to confidentially submit information using a smartphone, tablet, or computer.
Finally, please adopt and share these best practices that PC Magazine’s Kim Key identified, in order to protect yourself, your family members, and your friends:
Do not answer unknown numbers. Let them go to voicemail. iPhone users can silence unknown callers in Settings.
Filter your text messages so that any number outside of your contacts is directed to a separate folder.
Use a spam-blocking app and enable anti-phishing protection.