Well, it is tax time yet again! Tax season can cause people to be excited and also anxious, some get refunds, others have to pay, and regardless of which category you fall in, filing taxes is a pain for everyone. Everyone, that is, except scammers. For a scammer, tax season is a prime opportunity to prey on people and deceive taxpayers out of hard-earned money. Tax scams don’t just target your money, scammers are out to get your personal information as well. Falling victim to a tax scam can result in significant financial losses and long term damage to the taxpayer. The emotional damage of being scammed can leave you feeling violated on top of the potential financial fallout you could face from becoming a victim. Traditionally, tax scams have plagued taxpayers for years. However, now the fraudsters are adopting more sophisticated schemes blending social engineering with cutting-edge technology to target us the taxpayers. Here are some tax scams to watch out for during this year’s season:
- AI-generated phishing schemes – This year expect scammers to rely more on AI to craft highly convincing phishing emails and text messages. These types of communications mimic legit IRS notices and AI can generate personalized messages that include all your personal information to make it even harder to detect that you are being scammed. Be extremely cautious and wary of any unsolicited emails or text messages claiming urgent tax issues, especially if they are threatening or demanding. The IRS will never contact you via email or text! If you receive any such correspondence, always verify by contacting the IRS directly through irs.gov or official phone numbers.
- Fake tax preparer scams – Sometimes scammers pose as tax professionals and offer low-cost, free, or fast tax filing services. Once they gain access to your personal and financial information they file false returns in your name and steal your refund. Sometimes they will lure you in promising outrageous refund amounts. Always do your research before choosing a tax preparer. Look for credentials such as a Preparer Tax Identification Number and use references from someone you trust.
- Imposter phone calls – Scammers are still calling victims and posing as IRS agents, telling them they owe back taxes or penalties. These callers use fear tactics to coerce victims into making immediate payments. They will demand payment via gift cards, wire transfers, or crypto and they use caller ID spoofing to appear legit. The IRS will never call demanding immediate payment so if you receive a call like this just hang up. You can also report these scams to the Treasury Inspector General for Tax Administration.
- Social media scams – Social media platforms are vastly becoming a tool for tax scammers. Fraudsters use fake profiles to offer secret tax loopholes. They claim processing shortcuts and promote fraudulent investments. They also post phishing links leading to fake IRS sites that steal your information. Be extremely cautious about unsolicited IRS social media offers or links. To be safest, just stick to official IRS channels for any tax info.
- Data breaches and identity theft – Identity theft has always been an issue; scammers steal your information and file fraudulent tax returns in your name. Trusted companies you deal with such as healthcare, telephone providers, online retailers, etc., are hit with data breaches and any information you have entered is fair game to the hackers. And once your identity has been stolen it is a mess and takes months or years to clear it all up. Use strong passwords and MFA (multifactor authentication) on all accounts that store sensitive information. Also, filing your tax return early helps to lower the chances of someone trying to file a return in your name.
Tax scams have always been around, but with advancements in technology, the threats continue to grow. As with any scam, if you receive threatening or harassing communications from someone claiming to represent the IRS, hang up! Don’t let yourself be pressured into giving out information or sending any money. Always rely on a trusted professional to file your taxes, or you can always do them yourself. IRS.gov has resources available and can direct you to legit free tax filing sites that are trusted partners of the IRS. Don’t let yourself be fooled, we work hard and pay enough taxes through the year to allow ourselves to be scammed out of anything else.
