Have you received a phone call from an IRS agent recently? They may have claimed that you owe a huge tax bill and are facing jail time.
They were also trying to scam you.
Tax resolution fraud is a booming business. These sophisticated scams prey on people’s anxieties to get them to pay large amounts of money.
There are easy ways to avoid getting caught in this kind of scam. Are you wondering how to protect your personal information from scammers? Read on for five common tax resolution scams and how to avoid them!
What Are Tax Resolution Scams?
Tax scams are attempts to defraud taxpayers by posing as an IRS agent. Criminals will claim that the victim owes back taxes and is in danger of being arrested. They request personal information or other purchases in order to resolve the tax debt.
Tax resolution scams are mostly conducted over the phone or online. Scammers send phishing emails with malware links or requests for social security numbers. Or they may call you and claim that they can suspend your social if you don’t pay them money.
Just as a reminder, you should never give your personal information to someone who calls or emails you claiming to be from the IRS. If you do owe some back taxes, contact the IRS directly to arrange payment.
Why Are Tax Resolution Scams so Common?
While there is big money to be made in all kinds of fraudulent behavior, tax resolution scams are on the rise.
One reason is easy access to victims. More people have cell phones and they are likely to answer calls at any time. Scammers will prey on older or more vulnerable people with threatening or emotional stories.
Also, people are generally anxious about taxes. Tax season looms large each year, and tax preparers make a lot of money helping people file taxes. The idea of owing money to the IRS weighs heavily on people and this worry is easy to exploit.
Finally, with the rise of the internet, scammers can work on tax fraud year-round. Instead of waiting for tax season, these criminals can exploit the internet and email access to enact their scams.
Five Tax Resolution Scams to Watch out For
Each year, the IRS publishes a list of frauds and scams that are most commonly being used. Here are five ways that criminals will try to exploit your need for tax resolution:
1. Threatening to Suspend Your Social Security Number
You may receive a phone call that would strike fear in anyone. The caller will claim that you owe the IRS money. If you don’t pay up, they will suspend your social security number.
It sounds terrible – no more access to the number that defines so much about your life.
But, it’s just not true. The IRS will never call you with this kind of threatening language. This one is easy to avoid – once you’ve caught your breath.
How to avoid it: Know that the IRS cannot suspend your social security number. If you think you might owe the IRS money, contact them directly to make arrangements.
2. Phishing Emails
Phishing scams don’t just happen at tax time. These scams involve an email being sent that looks very official and may even have a link to an “irs.gov” site.
Cybercriminals get more detailed all the time. Most of the poorly-written email scams from Nigerian princes have fallen by the wayside. Now, fraudsters can make their work look polished and very convincing.
A phishing email will send you a link to a site or a form to fill out. When you click the link, malware will be installed on your computer. Hackers use this software to track your activity online, even using key trackers to find your passwords.
Some people who fall for this scam may even enter their personal information on the website form. Criminals may get all sorts of information, including social security numbers, that they can use to steal your identity.
How to avoid it: Never click on an email link that claims to be from the IRS. Go directly to the IRS website to find out any information you need online.
Robocalls are recorded calls that can be sent out to hundreds of phone numbers at a time. These calls cast a wide net, hoping that among those hundreds of people, at least one will respond and provide their personal information.
Again, the caller may sound very convincing – and threatening. The call may claim that legal action will be taken against you. They will ask you to contact them or send them money.
How to avoid it: Remember that the IRS will never call you and ask for personal information. The IRS will send you a notice in the mail and ask you to set up an in-person audit if needed. Never give your information or account access to someone over the phone.
4. Can You Pay Taxes with Gift Cards?
One of the newer scams involves a phone call from a fake IRS agent. The caller will claim that you owe back taxes, and must purchase gift cards in order to pay them off. They will request you buy the gift cards and provide the access information to them.
How to avoid it: This one does take a little bit of common sense. Even though they may sound very convincing, remember that the IRS has no need for an iTunes gift card.
5. Official-looking Forms
The IRS will officially contact you through the mail, so this is also a venue for criminals as well. You might receive a letter in the mail complete with the IRS seal on the envelope and stationery. The envelope might include an official-looking form for you to fill out and return.
How to avoid it: While you might receive a letter from the IRS, it will ask you to set up an appointment with one of their agents. It will never ask you for personal information right off the bat. If you do receive such a form, contact the IRS directly before sending any information.
Avoid Tax Resolution Scams
It’s important to know that the IRS will never do any of the following:
- Demand Immediate Payment of Back Taxes
- Call and Request Personal Information
- Threaten to Deport You
- Threaten to Suspend Your SSN
If you ever receive a call, email, or piece of mail that contains any of these, contact the IRS directly.
We’re Here to Help
It’s getting more difficult to protect your identity and tax security. If you’re looking for help with tax resolution or planning, contact experts that you can trust.