Tax Scams: 5 Scams to Look out for in 2020 Tax Season

When tax season comes around, the last thing you should have to worry about are scams. Although tax scams happen throughout the year, tax season is a typical time for scammers to take advantage of consumers. You might believe that you’ve received a phone call from the IRS, an email from a tax program, or a message from a trusted accountant.

Instead, the individual you’ve encountered is a scammer and a thief. No one’s social security number should be compromised, or their identity is stolen, but it happens far more often than it should. Arm yourself and let your tax refund (or payments!) be the only thing you’re worried about.

5 Tax Scams to Look out For

Some scams are more common than others. Here are the ones to look out for this year:

Social Security Administration Scam

You might think that you know this scam well. Perhaps you’re already a recipient of robocalls that link to a recording about the Social Security Administration. However, the newest scam steps it up a notch. Knowing that consumers might have read about SSA scams, this variety has a robocall link to a live person who will inform you that they are going to cancel or suspend your social security number.

That might sound unlikely, but the scammer will seem authoritative and be threatening. They will try and get a hold of your social security number, personal data, or say that you owe a fine and need to pay them via digital gift card or money wire, etc.

IRS Impersonationalization Scams

Did you receive an email from the IRS? Not so fast! The IRS has warned consumers that they do not send unsolicited emails. In 2019, the IRS and the Security Summit, their partner, sent out a warning to tax professionals and taxpayers. There is a popular scam hitting American inboxes everywhere.

According to that Security Summit warning, the email will have links that show an IRS.gov-like website with details pretending to be about the taxpayer’s refund, electronic return or tax account. The emails contain a “temporary password” or “one-time password” to “access” the files to submit the refund. But when taxpayers try to access these, it turns out to be a malicious file.

Even worse, you will see a link to a website that appears to be similar to IRS.gov, and the site will offer a temporary or one-use password to receive your taxpayer information. However, if you click on those links or provide information, your computer and data will be phished by malicious software and hacked.

Taxpayer Advocate Service Numbers

Scammers like to keep consumers on their toes. The more complicated and cutting edge the scam, the more people they’ll con. For this new scam, consumers appear to receive contact from the Taxpayer Advocate Service (TAS). TAS is a real service to protect consumer rights.

However, in this case, the scammer “spoofs” their phone number to make it look like it’s from the IRS. As the name implies, consumers go to TAS for help with consumer rights. When a scammer uses TAS, as their cover, they’ll reach out to you unprovoked. The scammer will act hostile and frustrated, unless you pay a fee or fine they will claim that you owe. They’ll keep your money and your information.

Rampant Copycat Websites

Imagine doing an online search and seeing dozens of copycat websites. There are so many fraudulent websites out there that it is difficult for the government to stop them all. While some of these web pages won’t break the law, they also won’t be the site you want. Trusting them will result in outside services you don’t need or erroneous charges.

Other sites are fraudulent and phish your information. If you click to download or on a link, your computer will become hacked by malware. Once hackers gain control of your device or computer, they can track every keystroke and get your passwords to sensitive accounts and your finances. This can lead to financial ruin.

Erroneous Refunds

A scammer who has your information can do many things with it. One option they have is to use your information to file a tax return and get the funds back from you through lies and excuses. They might make many excuses as to why, such as saying you had a direct deposit in error, etc. Once you give them the money, you’ll never see it again and have a hard time straightening everything out with your bank and the IRS.

How to Identify Tax Scams

You can save yourself the nightmare of being duped by scammers by knowing the facts. The IRS will NOT:

• They will not contact you via a social media platform, email, or text.
• They will not request your password, SSN, personal information, or PIN #.
• They will not ask you for banking, financial or credit card numbers or information.
• The IRS does not EVER ask a consumer to pay immediately, via phone, or any other method.
• They will not demand payment by gift or debit card, money wire, or cash. Real IRS bills are usually sent by mail and have official government addresses and websites attached to them.
• They will not send you emails about your personal and sensitive financial data with the IRS, and this includes details about your refund.

Warning Signs of a Tax Scam

These are some common IRS scam warning signs:

• Scammers may have fake IRS badge numbers that they provide you with, along with their phony names.
• They might have your (or a portion of) social security number. Do not be deceived just because they give you the last four digits of your SSN.
• They may spoof their number to prevent you from realizing you’re being conned. This means the number will look official but isn’t.
• Scammers may send you texts, emails, and other types of contact, to further deepen their con.
• You might hear other scammers in the background, or the scammer might fake the noise, to impersonate a real call center.
• You may be threatened with jail time, huge fines, and more, this scare tactic is effective and don’t fall for it!
• The fake SSA or IRS call might be part of a systematic con, and you could receive other fraudulent government calls.
• If someone claims to be from the government but asks for your credit card number over the phone, you’ve encountered a scammer.
• The IRS will not call you about an unexpected refund and ask for it back via phone, gift card, etc.

If You Believe You’ve Been Scammed:

First, contact the Social Security Administration and explain what happened. Request a credit freeze from the major reporting agencies (Equifax, Experian, TransUnion) and opt for credit monitoring. File a police report and contact all of your financial institutions from banks to credit cards and ask for safety monitoring for your accounts.

While it is more common to receive spam and scam calls than not, you can use education to spread the word and reduce scams. Search Social Catfish and track your scammers by name, verify email authenticity, phone number, photograph, and username.