Spotting Scams: 4 Common Tax Scams and How to Avoid Falling for Them
Photo: Kelly Sikkema / Unsplash
Tax season is a prime time for scammers. They know completing a tax return can be complicated, and they also know that most people fear the IRS so much that they will do almost anything to appease them. These two factors make taxpayers vulnerable to a multitude of scams designed to gather personal information and steal tax refunds.
The best way to avoid becoming a victim is to educate yourself. Knowing the types of deception scammers use to get your information or money can help you identify a racket when you see one. Below, we discuss several scams you should be aware of for the upcoming tax season.
- Identity Theft
Identity theft can happen anytime, but during tax season, scammers may attempt to use your personal information (name, address, social security number, birth date, etc.) to complete your online tax return lodgment and obtain your refund.
Most people find out someone has stolen their information when they file their taxes, only to be notified that a tax return has already been filed under their social security number. It can be frightening when this happens, but stay calm and file a Form 14039 Identity Theft Affidavit to notify the IRS of fraudulent activity.
- Gift Card Scams
Scammers use gift card scams in a variety of ways. During tax season, they may call you and tell you they are the IRS and that you owe back taxes. They threaten legal action if you do not remit payment in the form of various gift cards. If you purchase the gift cards and call them back, they’ll ask for the card numbers and PINs, which gives them full access to the money you’ve spent. They’ll then go online and make purchases, leaving you with no way to recoup the money you spent.
First and foremost, the IRS will never call you. If they need to contact you, they will send you something in the mail. If you get a call “from the IRS,” hang up. It’s a scammer for sure.
- Refund Recalculation Scams
Everyone wants the biggest refund they have coming to them, which is why this scam works so well. Scammers will send an email or text – again pretending to be the IRS – saying they made a mistake and that you have a bigger refund coming to you. All you have to do is click the link provided and enter your personal information. Once you do, they have access to everything they need to get into your bank accounts and credit cards or to open lines of credit in your name.
Again, the IRS will never contact you via email or text, only by mail. If you receive one of these emails, never click the link provided. Instead, delete the email immediately.
- Stimulus Payment Scams
While it’s true the government sent out stimulus payments during the pandemic, no new stimulus payments have been announced as of late. Scammers prey on individuals who don’t know any better by contacting them and telling them they have a stimulus payment waiting. You just have to click the link and provide the information. If you do, however, you’re giving scammers access to your sensitive information to use as they wish.
Remember, the IRS will never contact you by email, so right away, you know this is a scam. Never click any links, and don’t provide your personal information. Delete the email immediately.
These are just a few of the scams you should be aware of this coming tax season. Be smart, educate yourself, and be on the lookout for these tax scams.