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Beware of Tax Scams!

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They're at it again! Every year, tax season brings a fresh crop of scammers with yet another way to con you out of your money – and sanity. The IRS and the FTC are both warning the public about a series of tax-related scams to be wary of during this busy and stressful time.

You may be delighted to have finally filed your taxes and be done with all those forms, but unfortunately, the scams are just beginning.

Here at USCCU, the last thing we want is for you to lose your money to criminals. That's why we've gathered all the info you'll need about this year's tax scams so you can arm yourself with information against these crimes.

Here's what to know about the latest tax scams:

Scam variations

There are several ways scammers can use tax season for fraud.

1.) Phony refund

In one scenario, scammers will use your identity to file a phony tax return in your name. The refund will be deposited directly into your bank account and you might not even know it. The scammers will then call you, posing as IRS officials. They'll claim this money was mistakenly deposited into your account and must be returned. You may even be threatened with criminal charges, an arrest warrant or blacklisting of your Social Security number.

Of course, if you comply with the scammer's instructions, you'll be sending the money directly to them and not to the IRS. Also, if you try to file a legitimate return, you may hit a brick wall since a return has already been filed in your name.

2.) Identity theft

In another version, scammers will use tax season to lure you into sharing your personal information. Here's how it works: You log onto a "tax prep" site and fill in all the information necessary to e-file your return. Unfortunately for you, the site is phony and you just shared all of your identifying details with a band of crooks. Once the scammers have this information, they are free to steal your identity, rack up huge bills in your name and destroy your credit score. This scam has grown increasingly more widespread and the IRS has repeatedly warned against e-filing without using due caution.

3.) Tax collectors

In another widely perpetrated scam, criminals call up unsuspecting taxpayers posing as IRS agents and claim the victim owes a large amount of money to the IRS. They will go to any means to convince victims that the matter is urgent, including threatening to arrest the victim, suspending their driver's license, freezing their accounts or even deporting them. The phone number the callers use looks nearly identical to the IRS's toll-free number, but the heavy accents, poor command of English and the fake IRS badge numbers can help you recognize these scammers for what they are.

Fighting identity theft

You can protect yourself from these scams by using the following precautions:

  • Know that the IRS will only contact you by snail mail and never by phone. They will also never demand a specific means of payment, such as a prepaid debit card or wire transfer.
  • File early in the tax season. It may be too late for this year, but for the future, remember that the earlier you file, the less susceptible you are to tax scams.
  • Only e-file using a secure internet connection.
  • When using an online tax preparation service, look for the required tax-preparer identification number on the web page. If you can't find it, immediately log out of the site.
  • Verify that the site you're using is secure by checking the URL for an "https." Be sure to check for that "s" on every subsequent page you visit on the site.
  • If you use a personal tax preparer, inquire about their data security practices.
  • Respond to all mail inquiries from the IRS as quickly as possible.

If you've been scammed

If you suspect you've received an illegitimate "tax refund," don't despair. You can still repair the damage. Simply contact the IRS and ask how you can return your refund. Depending on the extent of the scam's damage, you may need to file an Identity Theft Affidavit with the IRS.

Next, be sure to visit IdentityTheft.gov or ftc.gov/complaint to report the scam to the FTC. They want to catch the crooks who did this to you as badly as you do!

As a law-abiding citizen, you deserve to file your taxes without running the risk of having your identity stolen and to safely receive any refunds you have coming to you. Stay one step ahead of all scammers by being proactive, knowledgeable and cautious. Don't be a victim this tax season!

Your Turn: Have you been targeted by a tax scam? How did you spot it for what it was? Share your experience with us in the comments!

 

SOURCES:

https://www.google.com/amp/nbc4i.com/2018/03/12/irs-warning-taxpayers-of-new-twist-on-refund-scam/amp/

https://www.consumer.ftc.gov/blog/2018/03/watch-out-these-new-tax-scams

https://www.google.com/amp/s/www.forbes.com/sites/kellyphillipserb/2018/03/06/phone-scams-remain-on-irs-dirty-dozen-list-of-tax-scams/amp/