Recently the IRS issued its annual list of “Dirty Dozen” tax scams although many of these scams are not scams that cheat taxpayers, but rather scams the scammers attempt to perpetrate on the IRS in order to get large fraudulent refunds. These frauds against the IRS include excessive claims for fuel credits, abusive tax shelters and offshore tax avoidance schemes. Here at Scamicide, however, we focus on those scams that target innocent citizens rather than the IRS. The three primary consumer tax scams on the IRS’ list are phone scams, phishing scams and inflated refund scams.
This has been a particularly big year for aggressive phone scams where people receive phone calls from people purporting to be IRS employees demanding immediate payments of purported overdo taxes by wired funds or prepaid money cards. People receiving these calls are threatened with fines, arrest, deportation and loss of drivers’ licenses among other penalties unless there is immediate compliance with the caller’s demand. This is a total scam. The IRS will not initiate such communications with any taxpayer by phone.
The second scam involves phony emails or text messages that again, appear to come from the IRS demanding information or payments under various guises. Again, the IRS will not communicate with taxpayers in this fashion, so you can be confident when you receive such a communication that it is a scam.
Finally, unscrupulous scammers posing as tax preparers may promise huge refunds and ask unwary taxpayers to sign blank returns that the scammer fills in with fraudulent information. Often these phony tax preparers make initial contact through a social group, religious group or some other group of which you may be a member taking advantage of the high level of trust for people who share such affiliations. This type of fraud is called affinity fraud.
The IRS will not initiate contact with anyone by telephone and even if your Caller ID indicates that the call is from the IRS, Caller ID can be fooled through a technique called “spoofing” to make it appear that the call has originated from the IRS when it has not. In addition, the IRS will never demand that you wire in a payment or pay immediately by a prepaid money card. Just hang up if you receive such a call.
Just as the IRS will not initiate contact with you by phone, it will also not initiate contact with you by email or text message. Never provide personal information in response to an email until you have confirmed that the email or text message is legitimate. In this case, you don’t even have to bother to verify the email or text message because the IRS will not communicate with you in this manner. Also, don’t ever click on links or download attachments in emails or text messages unless you have confirmed that they are legitimate because often these links or attachments end up downloading malware on your computer or other device that steals your personal information and uses it to make you a victim of identity theft.
Finally, always check out the reputation and honesty of anyone you may use to prepare your taxes. Never sign a blank form and remember my motto, “trust me, you can’t trust anyone.” Merely because you may share a religious or social affiliation with someone does not make them trustworthy. Just ask the people that trusted Bernie Madoff.