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Tax-Time Tips to Avoid Fraud

Don't fall victim to IRS-related scams

It’s that time of year again – tax refund season!  While refunds can provide much needed assistance, it’s also important to remember that tax season is one of the most financially fraudulent times of the year.  Criminals overwhelmingly make use of the time from January to April to conduct scams to try to trick people out of their money or to divulge personal information.  The most common way they do this is to pose as IRS agents and make aggressive phone calls to try to frighten or intimidate people into giving up their refunds and/or sensitive information.

Members must stay alert for these scams to protect themselves from fraud.  One of the most common tactics these criminals use is demanding immediate payment of “owed” taxes, even if the member is set to receive a refund.  Often, they request these payments in the form of prepaid debit cards, gift cards, or wire transaction.  In general, the IRS will mail out a bill to taxpayers who owe such taxes, and they do not accept gift cards or prepaid debit cards as forms of payment for these types of taxes.

Another type of scam is to claim that someone has not paid their taxes and threatening to immediately have local police or other law enforcement agencies arrest the taxpayer for not paying.  This is a panic-based tactic that plays on people’s fears of arrest and jail.  The IRS will never directly call you and threaten jail time.

Yet another con is to demand that someone pay taxes immediately but evade questions about the taxes owed.  The scammers will refuse to answer any questions about the supposedly owed taxes and will try to dissuade you from inquiring about or appealing the amount owed.  They will stonewall you and claim that they aren’t allowed to give out such information, and they will attempt to intimidate you into not calling the IRS directly to inquire about it.

Fraudsters may also call and claim that they need your personal information to process your tax return.  This can be enticing for many people, particularly those who weren’t expecting a refund and could use the money.  They will claim to be IRS agents who need to confirm things like your social security number and routing and account number.  The IRS will never call you and demand your full social security number, and you should always be cautious when giving out your personal information over the phone.

A good rule of thumb if you receive an unexpected call from someone claiming to work with the IRS is to take down as much information as name, title, identification number, and/or extension of the “agent”, then hang up and call the IRS customer service phone number to try to reach back out to that same person.  The IRS’ toll-free phone number, which is available 24 hours a day, is 1-800-829-1040.

Should you receive a call that you believe to be fraudulent, you should follow these steps: 1) Record the phone number and then hang up the phone immediately; 2) Report the call to the Treasury Inspector General for Tax Administration (TIGTA) using their online reporting system or by calling 1-800-366-4484; 3) Report the number to [email protected] and put “IRS Phone Scam” in the subject line. Also remember that scammers have the technology to spoof phone numbers. So even if that caller ID looks like a legitimate number, it could still be a scammer calling!

It’s important to stay vigilant during tax season and not allow yourself to fall prey to fraudulent phone calls.  Also, keep in mind that phone calls are not the only way criminals may try to reach out to you.  Emails, letters, text messaging, and social media can also be used to perpetrate such scams, and it’s up to you to keep a careful eye on any communications you receive from the IRS.  Be cautious and use your best judgement when interacting with any potentially fraudulent situations.  When in doubt, reach out to the IRS directly with your questions.  It’s better to wait on hold but get concrete answers to your concerns than to give fraudsters your hard-earned money or personal information.

Remember – protect yourself and your money by not falling victim to greedy, but convincing, criminals!

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