In the months before this year’s April filing deadline, the IRS once again issued consumer warnings about common tax scams. A recent USA Today report stated, that such “phishing scams” by email or text messages are up by 400 percent.
According to the IRS, these ongoing scams are costing taxpayers millions. Topping this year’s scam alerts are so-called phishing scams. These schemes involve emailed or text messages that are designed to trick taxpayers into revealing personal information. According to the IRS, the email or the text message does a very good job of looking like it is from the IRS or some other official agency, and “includes a link to a bogus web site intended to mirror the official IRS web site.”
These emails contain the direction “you are to update your IRS e-file immediately.” The emails may mention USA.gov and IRSgov (without a dot between “IRS” and “gov”), though notably, not to be confused with the official IRS.gov (with a dot). Be careful and vigilant, these emails are not from the IRS. By clicking on the link and entering any information can cause you to be a victim of identity theft.
The agency advises that phone scams are still a common practice as well. The targeted victim will get a call from someone claiming to be from the IRS. The caller very aggressively demands payments—and often will threaten the receiver of the call with arrest if they do not make an immediate payment over the phone.
Please note the IRS never calls a taxpayer without having sent a letter first and will never demand payments. The IRS will never threaten you without giving you the opportunity to dispute the debt or make a payment plan.
Rounding out the agency’s current “top three” tax scams is someone filing a fraudulent return in your name. This is usually the result of falling prey to one of the other scams. Once someone obtains your social security number or your tax identity document number, they file a fraudulent return on your behalf and obtain a refund in your name.
This can be a nightmare when you go to file your legitimate tax return. The IRS says they have put in new safeguards this year to avoid fraudulent returns, and to better identify those that have been filed by a scammer.
Just how big is the problem?
Tax scams are a growing problem. All forms of tax scams are up from the same time last year. According to the IRS, so far in 2016:
- January featured 1,026 phishing and malware incidents, up from 254 during the same month last year.
- The trend continued in February, with over 360 incidents reported. The total topped the 201 full-month total in 2015.
- The total number of incidents reported represent more than half the 2,748 total for all of last year.
How to report being scammed
If you receive any email as described, no matter how official it looks, do not click on any of the links within; if you do, you will be taken to a phishing site and this can open your system up to malicious software.
You should report it to the federal authorities by forwarding it to email@example.com.
If you get a suspicious phone call, give them no information and hang up. Contact the IRS to report the call. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
Also, report the call to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.
Always remember that the IRS and its affiliated organizations do not ever send unsolicited electronic communications, make first contact regarding tax matters via email, or any other digital media, including phone texts.
Steven Blumenthal, CPA is the Principal of MBAF CPA’s LLC, located on 440 Park Avenue South, New York, NY 10016. He can be reached by telephone at (212) 931-9254 or email at firstname.lastname@example.org. Compliance with and understanding the difference between scams and legitimate income tax problems, can be complex. If you would like to benefit from MBAF CPA’s LLC’s expertise in these areas, or if you have further questions on this advisory, do not hesitate to contact their tax & accounting specialists at (212) 576-1400.