Scammers representing themselves as part of the Internal Revenue Service (IRS) are amongst the most popular scams. This time of year, it is always good to be reminded of the tips that may help you avoid being scammed.

IRS employees will not:
• Call demanding immediate payment.
• Call you without first sending a bill in the mail.
• Demand you pay your taxes in a specific way.
• Ask for credit or debit card numbers over the phone.
• Threaten to have you arrested.
• Threaten legal action.

If you receive an inquiry like this, report the incident using:
• The “IRS Impersonation Scam Reporting” page.
• The “FTC Complaint Assistant” and include “IRS Telephone Scam” in the comments.

Below are other types of scams:

Pandemic Scams
Criminals still use the COVID-19 pandemic to steal people’s money and identity with phishing emails, social media posts, phone calls, and text messages. All these efforts can lead to sensitive personal information being stolen, and scammers using this information to file a fraudulent tax return as well as harming victims in other ways. Some of the scams people should be on the lookout for include Economic Impact Payment and tax refund scams, unemployment fraud leading to inaccurate taxpayer 1099-Gs, fake employment offers on social media, and fake charities that steal taxpayers’ money.

Offer In Compromise
Offer in Compromise or OIC “mills,” make outlandish claims, usually in local advertising, about how they can settle a person’s tax debt for pennies on the dollar. Often, the reality is that taxpayers pay the OIC mill a fee to get the same deal they could have gotten on their own by working directly with the IRS.

Suspicious Communications
Every form of suspicious communication is designed to trick, surprise, or scare someone into responding before thinking. Criminals use a variety of communications to lure potential victims. The IRS warns taxpayers to be on the lookout for suspicious activity across four common forms of communication: email, social media, telephone, and text messages. Victims are tricked into providing sensitive personal financial information, money, or other information. This information can be used to file false tax returns and tap into financial accounts.

Spear-Fishing Attacks
Spear phishing scams target individuals or groups. Criminals try to steal client data and tax preparers’ identities to file fraudulent tax returns for refunds. Spear phishing can be tailored to attack any type of business or organization, so everyone needs to be skeptical of emails requesting financial or personal information.

A recent spear phishing email used the IRS logo and a variety of subject lines such as “Action Required: Your account has now been put on hold” to steal tax professionals’ software preparation credentials. The scam email contains a link that if clicked will send users to a website that shows the logos of several popular tax software preparation providers. Clicking on one of these logos will prompt a request for tax preparer account credentials. The IRS warns tax pros not to respond or take any of the steps outlined in the email. The IRS has observed similar spear-phishing emails claiming to be from “tax preparation application providers.”

Common Sense methods to avoid being victimized:

  1. Always be skeptical of any emails or text messages—be aware of the sender’s email and do not click on links.
  2. Never give any personal information to anyone who contacts you, such as social security numbers, dates of birth, PIN numbers, bank or credit card numbers.
  3. Check your bank accounts and credit card accounts frequently for unusual activity.
  4. Ignore solicitations that sound too good to be true; they usually are.
  5. Never rush financial decisions.
  6. Only do business with companies that you trust; you can’t judge a company by its website.
  7. Consider obtaining identity protection and credit monitoring services. The speed of being notified of activity is paramount to shutting off activity. Freezing your credit with the three credit bureaus is another option.
  8. Check your credit report annually; you can obtain a free one from once a year.

Lastly, the one thing to remember is that getting scammed can happen to anyone. These criminals are extremely savvy. The important thing is to be knowledgeable on how these scams can happen, look out for aging adults in your life (the scammers love to target the elderly), and immediately report the incident to your financial institutions, the authorities, and any scam reporting agencies.

Jan’s passion for helping clients work towards their financial goals began almost 40 years ago. His planning is based on personal relationships and a true understanding of clients and their goals. Jan graduated from George Washington University with a BBA in Accounting and an MBA in Finance and Investments. He has been a Certified Financial Planner since 1984. Jan enjoys music, travel, cooking, and family time.

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