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3 Types of Tax Scams

Many people who are due a refund look forward to tax time. However, there’s another group who looks forward to the tax season as well--scammers. People running IRS scams employ various techniques to swindle honest taxpayers out of their hard-earned money. Learn how to spot their scams.

Phishing Scam

Phishing is the term used for attempts to obtain private information such as credit card details, usernames, and passwords. Individuals running a tax phishing scam send an email pretending to be from the IRS. The email may threaten the individual with an audit or it may promise more information about a refund. The goal is to send people to a phony website, set up to look like the official IRS site, and to collect private personal and financial information. You’ll know it’s a scam because the IRS doesn’t ever communicate via email. You can forward the fake email to for tax help.

Telephone Scam

People running a telephone scam make calls pretending to be employees from the IRS, insisting you owe taxes that must be paid immediately. They insist on a wire transfer or payment via a pre-loaded debit card. It’s easy to be fooled, because they can manipulate caller ID so that the call appears to originate from the IRS. However, the IRS typically makes contact via mail if you owe money, and they don’t demand a particular method of payment. Telephone scammers often become hostile and threaten the victim. Remember that the IRS will work with you to set up a payment plan rather than using aggressive tactics to demand payment. If you receive such a call, report it by telephoning the Treasury Inspector General for Tax Administration at 800-366-4484.

Stolen Identity Scam

Identity theft can occur in various ways. Thieves may steal your wallet, compromise a business that has your personal information, or sift through your trash. They then use the information to commit tax fraud in your name, often claiming a huge refund. Signs that tax fraud has occurred include communication from the IRS indicating two returns have been filed under your name or that wages have been reported that don’t belong to you. This likely means the person who stole your identity used it to obtain a job. Stolen identity issues can take some time to sort out and will delay any refund due to you. The IRS is committed to addressing identity fraud in a timely manner, and you can call the IRS Identity Protection Specialized Unit for tax help at 1-800-908-4490.

Obviously the best-case scenario is to protect your personal information to prevent thieves from gaining access to it. In addition, understand how the IRS typically operates so you don’t become an unwitting victim to IRS impersonation scams. And if you believe you have been the victim of a scam, contact the appropriate department right away to obtain IRS tax relief and prevent further damage to your name.

Last Updated: January 06, 2016