Tax time is here and in weeks, millions of tax payers will be filing their 2017 taxes. Every tax season I receive new clients that come filled with horror stories of past year tax experiences but Tax Fraud and Scams is becoming a bigger problem every year. And even though tax scams are a problem that could occur any day of the year, tax payers are targets and can be especially vulnerable as they complete their taxes for the April 18th deadline.

According to an IRS, thousands of people have lost millions of dollars and their personal information to tax scams and fake IRS communication in recent years. Last year, IRS scams were the No. 1 complaint made through the Better Business Bureau’s Scam Tracker tool.

Tax scams usually fall under three categories: fraudulent returns, phone scams, and phishing scams. This article will help you identify the most common types of tax related fraud, and how to prevent yourself from falling victim this tax season.

Tax Fraud Scam #1: Fraudulent Returns

The amount of fraudulent tax returns has increased over the past few years; however, the IRS has been able to step up its efforts to combat scammers’ efforts. The IRS was able to detect 35,000 fraudulent returns during the first few months of 2016, and prevented $193.8 million in fraudulent returns. Despite this effort, there’s still a chance your identity could be used to file a fraudulent tax return.

How to prevent it: though having a fraudulent tax return completed in your name is not completely avoidable, there are things you can do to help prevent this from happening such as:

File your tax return as soon as possible. Since the IRS only accepts one tax return per social security number, it makes it nearly impossible for a scammer to tax file a fraudulent return with your information if you’ve already filed.

To prevent fraudulent tax returns in the future, be stingy about where you give out your social security number, make it a habit to check your credit report, and make sure to shred all documents that contain sensitive personal information.

Tax Fraud Scam #2: Phone Scams

One of the most common types of tax related scams are phone scams where crooks place callpretending to be IRS agents. Phone scams have cost consumers $23 million over the course of the past few years. In some instances consumers’ caller ids even read, “IRS-IMPORTANT.”

How to prevent it: know the IRS will NEVER:

  • Call you and demand immediate payment.
  • Call you before first mailing you a bill.
  • Demand that you make a payment without providing you with an opportunity to appeal.
  • Require a specific payment method or ask for your credit card or debit card number over the phone.
  • Threaten to have you arrested for not paying.

Tax Fraud Scam #3: Phishing Scams

During the 2016 tax season the IRS saw a 400% increase in phishing and malware related scams. This means it’s highly unlikely for these types of scams to decrease in 2017. In most cases these scams come in the form of email, but can also be sent via text message now. In both instances, victims are tricked into thinking the messages have come directly from the IRS. Many of these emails and text messages look highly sophisticated and real, and may even direct you to a website that looks very similar to the official IRS website (www.irs.gov). One of the most popular types of tax related phishing scams comes in the form of an email that appears to be from the IRS. This email will contain links, taking victims to a fake website designed to mirror the real IRS website. This email will ask that you update your IRS e-file immediately, and as a result, steal your information. Thankfully these types of scams are avoidable if you know what to look for.

How to prevent it: the IRS does not initiate contact with taxpayers by email, text, social media, or any messagingnservice mainly by physical letters mailed. The IRS’ website is www.irs.gov, and any legitimate page on the IRS’ website will begin with irs.gov. Do not be confused by other close variations such as irsgov, irs.net, irs.org, etc.

If you receive an email from a sender claiming to be the IRS, and you weren’t expecting one, do not reply to the email. In addition, do not click on any links within the email or open any attachments. All unsolicited emails from the “IRS” should be sent to phishing@irs.gov.

​Do You Believe You Have Become a Victim Of Identity Theft?

Identity thieves and scam artists are always thinking of new ways to trick unsuspecting taxpayers. You should be on guard against email and phone scams, which are particularly
common during tax season. For example, taxpayers have reported scams demanding immediate payment for taxes owed or requesting personal information.

  • Report the scam to the Treasury Inspector General for Tax Administration. The phone number is 1-800-366- 4484.
  • Forward emails you think come from scammers to phishing@irs.gov.
  • Contact the IRS Identity Protection Specialized Unit if you believe someone has used your personal information to file a tax return or steal your identity. The phone number is 1-800-908-4490.