Identity Theft Scams You Should Look Out for at the End of Tax Season

Take it from any CPA. Tax time did not end on April 18. Between federal and state extensions, tax time can linger well into Halloween. And along with receipts, W2s, short forms, long forms and everything in between, tax season scams are lurking. In fact, the IRS has openly warned that “aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, headlining the annual ‘Dirty Dozen’ list of tax scams for the 2016 filing season.”

What do these scams look like?

Well, the main scam generally starts with a phone call whose caller ID looks like “IRS” and often fakes like it’s coming from a real IRS phone number. The scammers then try to convince you they are IRS employees. They’ll use fake names and present fake badge numbers. They might even offer a bit of info about you, like your name and/or address.

Then, they’ll try one of two things:

  1. Tell you that you owe money to the IRS and that it must be paid immediately. They threaten you with arrest, notifying your employer or forcing closure of your business and taking away your driver’s license or passport. They tend to be very aggressive and demand that the “tax debt” be paid immediately by a debit card or wire transfer to avoid those negative consequences.  
  2. Tell you that there is a large refund owed to you but that they’ve had a problem paying you. For example, they had an issue with transferring the money to your credit card or bank account and they require the details of your bank account or credit card to affect the transfer. They then use your financial information to transfer money into their accounts.

Not only will they do this with live calls but they will leave similar messages as voicemails, demanding an immediate call back to a number they provide.

This a really tricky scam, since just about everyone is scared of the IRS. Worse still is that they often target immigrants or others that may not be familiar with how the IRS works. And they have become more and more sophisticated with their approach, making it hard to tell right away that it’s a scam. For example, they will provide a real IRS address where they tell you to mail a form to get a receipt for the payment that was made. So if you do a quick search on the address it will seem legitimate.

How do you know when it's a scam?

What’s important to know is that the IRS has many restrictions on how it can collect a debt:

  • The IRS always mails a physical letter first before calling about taxes owed.
  • They will never call to demand immediate payment or demand payment without giving you the opportunity to go through an appeal process.
  • They will never require a specific payment method like a prepaid debit card.
  • The IRS will never ask for credit or debit card numbers or bank account numbers over the phone.
  • Finally, the IRS will never threaten you with law-enforcement to arrest you from not paying.

You can be sure that any call is a scam if doesn’t follow a physical letter, demands immediate payment, requires a specific method of payment, asks for payment info, or threatens law enforcement actions.

If, for any reason, you think you might owe money, call the IRS at their real number (800-829-1040, toll-free) and discuss your return with them.

How can you avoid falling into the latest scams and tricks this year?

Read on for our recommendation on how to easily identify IRS impersonators who are trying to trick you out of your hard-earned cash. To prevent yourself from getting scammed, follow these three rules:

  1. Don’t answer calls from numbers you don’t recognize. That’s true even if it’s from your own area code or has a caller ID of a company you might have vaguely heard of. Sometimes scammers spoof their phone number and hide their identity behind a number with a local area code that you know.   And they often fake the name that appears in their caller ID too so that they have more credibility.
  2. Let calls from numbers you don’t recognize roll to voicemail. Voicemail is your friend, as it gives you a chance to see what the call was all about, and many scam callers won’t bother leaving a message. If you’re worried about missing an important call, don’t–the chances are the caller will leave you a voicemail anyway and you can just call them back. It’s not the end of the world to listen to a few seconds of a voice message!
  3. A little research goes a long way. There are plenty of ways to look up information on a number. It takes very little time to do a quick Google search. My company, YouMail, also provides an online phone directory for more information on most numbers in the U.S., and it publishes a monthly Robocall Index that highlights top spam numbers.  Search any of these and you’ll see tons of results and comments, especially if the number belongs to a scammer. 

We’re all paying more taxes than we’d like–now we have to be on the lookout for people trying to trick us into paying taxes we don’t owe!

Alex Quilici has been a successful entrepreneur in the telephone space for the past 15 years. He is now the CEO of YouMail, which replaces traditional voicemail with unique call management services.