By Jane M. Winand, Legal Assistance Attorney
During tax-preparation time, tax scams and fake Internal Revenue Service communications are common.
According to the IRS, thousands of people every year lose millions of dollars and their personal and financial information to these scams. Such scams target taxpayers, tax preparers, and businesses.
Always remember that the IRS never initiates contact with taxpayers by email, text messages or social media channels to request personal or financial information.
Furthermore, the IRS does not threaten taxpayers with imprisonment, lawsuits or other enforcement actions.
A common scam involves aggressive persons claiming to be IRS employees who call taxpayers, including recent immigrants. The callers use fake names and bogus IRS identification badge numbers and may alter the caller ID to make it appear as though the IRS is calling.
One approach has the caller telling the victim that money is owed to the IRS and must be paid immediately by a wire transfer or pre-loaded debit card. If the victim refuses to cooperate, the caller becomes hostile and abusive and then threatens arrest, suspension of a driver’s license or business license, or deportation.
Another approach involves the caller notifying the victim that a refund is due and the taxpayer must provide private information to claim the refund. Of course, the refund is bogus and the caller simply wants to obtain private information to engage in identity theft.
If the victim is not home when the scammer calls, the caller will often leave an “urgent” callback request.
Malware and phishing are also popular with tax scammers. Emails and text messages are designed to trick taxpayers into thinking that the IRS or a tax software company is contacting them. The taxpayer may be asked to provide information about their filing status, refund amount, PIN information and other personal data.
Clicking on a link provided in the email could take the taxpayer to a site designed to look like an official tax site, but any information provided by the taxpayer to the fake website would then be used to file false tax returns.
The fake websites could also carry malware, which can infect the taxpayer’s computer and allow criminals access to personal files. These bogus websites attempt to mirror the official IRS website. Be wary of emails mentioning USA.gov or IRSgov. (The official IRS website is IRS.gov with a dot.)
Even volunteer organizations can be used by scammers to attempt to obtain personal information. The Taxpayer Advocacy Panel is a volunteer board that advises the IRS on systemic issues involving taxpayers.
Scammers have sent taxpayers emails purportedly from TAP indicating that a refund is due. The taxpayer is then asked in the email to provide personal and financial information on a bogus website.
TAP never requests, and has no access to, any taxpayer’s personal or financial information. Unless the taxpayer has first contacted TAP directly, such TAP emails should be disregarded.
Scammers have displayed amazing creativity and have tried other unusual tactics to steal your money such as:
Sending a fake email purporting to be a notice of an IRS tax bill related to the Affordable Care Act.
Directing emails using a corporate officer’s name to request employee tax forms from company payroll and human resources departments.
IRS impersonators calling taxpayers to demand payment of a non-existent “Federal Student Tax.”
Imitating software providers to trick professional tax preparers into disclosing taxpayer information.
Contacting taxpayers to demand payment using iTunes gift cards for fake taxes.
Remember, the IRS will never call to demand immediate payment using a specific method such as a wire transfer or prepaid debit card. The IRS will first mail you a written notice if you owe taxes.
The IRS will not threaten to immediately bring in law enforcement to arrest you for not paying. The IRS also will not demand that you pay taxes without giving you the opportunity to challenge the amount you supposedly owe.
Finally, the IRS will never ask for credit or debit card numbers over the phone.
For more information about tax scams, visit the IRS website.
The Joint Installation Tax Center is available to assist service members, retirees and their family members with free federal and state income tax preparation and electronic filing at 4217 Morrison St., Office of the Staff Judge Advocate.
To schedule an appointment, call the Tax Center at 301-677-9366.