Tax season is upon us, and with it comes the sobering reality of tax scams. It’s a recurring narrative—year after year, unsuspecting individuals and astute business owners find themselves trapped in the intricate web of fraudulent schemes, often losing money and their valuable personal information.
The Better Business Bureau’s report for 2022 is a stark wake-up call to the financial toll of these deceptive tactics, with taxpayers losing a staggering $5.7 billion. In this article, we arm you with knowledge of the top five tax scams you need to be on high alert for to reduce your risk of falling prey to these scammers.
1. The Refund Scam
The Internal Revenue Service (IRS) has warned sternly about this insidious scam targeting taxpayers. In this refund scheme, individuals receive official-looking letters claiming they are entitled to unclaimed refunds. These letters often include contact information and phone numbers not affiliated with the IRS. Moreover, recipients are sometimes asked to provide sensitive personal information, such as detailed images of driver’s licenses, which identity thieves can exploit.
Please don’t fall for it! Remain vigilant and cautious of such deceptive communications.
2. Identity Theft
Identity theft remains a significant concern during tax season. Cybercriminals can use stolen personal information to file fake tax returns and claim refunds in the victim’s name, often before the legitimate taxpayer files their return.
The IRS reported that over 1 million tax returns were flagged for possible identity theft last year alone. To protect yourself, consider applying for an Identity Protection PIN from the IRS and filing your tax return early. If you suspect identity theft, contact the IRS immediately.
3. Another Tax Agency Scam
Scammers may adopt the appearance of legitimate or fictitious tax agencies when making phone calls. Instances include impersonating entities like the Taxpayer Advocate Service or the nonexistent Bureau of Tax Enforcement.
While the Taxpayer Advocate Service is legitimate, it does not initiate unsolicited calls to taxpayers. On the other hand, the Bureau of Tax Enforcement is not a genuine organization.
4. The “Impact Payment” Scam
A new online scam involving purported “impact payments” from the IRS has emerged. Fraudulent emails claim to address inconsistencies in tax returns and promise refunds upon submission of required documents. Recipients are urged not to click on any links and report such scams to the IRS immediately.
5. The “Additional Information Needed” Scam
Taxpayers should be wary of emails claiming to be from the IRS requesting additional information. While legitimate forms may be required for tax purposes, the IRS does not utilize email, text messages, or social media platforms to request personal or financial information. Their primary mode of communication is through physical mail. In instances where mail communication is not feasible, the IRS may resort to contacting you via phone. However, it’s crucial to understand that during such phone calls, the IRS will refrain from soliciting personal or financial details and will never resort to threats or demands for payment.
If you question the authenticity of any communication purportedly from the IRS, refer to this article to discern its legitimacy.
Protect Yourself
Tax season is notorious for bringing out scammers, but with a bit of vigilance, you can spot IRS imposters and safeguard your finances and personal data.
To bolster your defenses against identity theft:
- Consider filing your taxes early. By filing promptly, you reduce the window of opportunity for scammers to impersonate you.
- When selecting a tax preparer, exercise caution and thoroughly vet any candidates.
- Beware of preparers who promise hefty refunds without prior access to your information.
- Additionally, consider investing in a fraud protection service for security and peace of mind.
- Have a robust cyber security system in place to make sure your organization is protected at every possible entry point, and scam emails don’t reach your inbox.
Meeting Tree Computer has years of experience uncovering security flaws and implementing effective solutions. Don’t wait until it’s too late—schedule your no-obligation security assessment today for the ultimate peace of mind. Click here to get started and safeguard your digital assets from cyber threats.
