IS IT THE IRS OR IS IT A SCAM?

   

Tax Scams Targeting Taxpayers

   

Scams continue to use the IRS as a lure. These tax scams take many different forms. The most common scams are phone calls and emails from thieves who pretend to be from the IRS. Scammers use the IRS name, logo or a fake web site to try and steal money and even identity from taxpayers.

Thousands of people have lost millions of dollars and their personal information to tax scams. Scammers use the regular mail, telephone, or email to set up individuals, businesses, payroll and tax professionals.

 

These scams affect people in every part of the country and in every walk of life.

Click on each of the scams below to read more
                    
 

Tax Return Preparer Fraud

 

 

Tax reform has propelled more taxpayers than ever to a paid pro to prepare their returns this year and a vibrant minority of dishonest preparers operate each filing season perpetrating refund fraud, ID theft and other scams.

 

The majority of tax professionals provide honest high-quality service, but there are some dishonest preparers who set up shop each filing season to take advantage of taxpayers through refund fraud, identity theft and other scams.​ According to the IRS, similar to other tax preparation schemes, dishonest and unscrupulous ghost tax return preparers look to make a fast buck by promising a big refund or charging fees based on a percentage of the refund. These scammers hurt honest taxpayers who are simply trying to do the right thing and file a legitimate tax return.

If a tax preparer promises a huge refund, question it.

 

Fake tax preparers use flyers, advertisements, phony storefronts and word of mouth via community groups where trust is high to find their victims. They may even make presentations through community groups or churches. 

 

Avoid preparers who ask taxpayers to sign a blank return and promise a big refund before looking at any records or charge fees based on a percentage of the refund. They may also file a false return in their client’s name, and the client never knows that a refund was paid.

click here to read more information about

Your Tax Preparer - Credentials & Qualifications

 

The IRS has issued additional warnings for "ghost tax preparers" who charge someone to do their taxes, often based on a large refund amount, and then fail to mail in the tax return -- leaving the customer with an unfiled tax return and no refund.

Ghost tax return preparers may:

           

  • Require payment in cash only and not provide a receipt.

  • Invent income to erroneously qualify their clients for tax credits or claim fake deductions to boost their refunds.

  • Direct refunds into their own bank account rather than the taxpayer’s account.

  • Look for a preparer who’s available year-round, the IRS advises taxpayers, and ask to see their PTIN.

IRS warning: Don’t be a victim of ‘ghost’ tax return preparers

Updated January 2020

 

A ghost preparer is paid to prepare a tax return but does not sign it as the paid preparer. These phantom preparers who won't put their name on the tax return are a warning sign for taxpayers of a potential scam. See IR-2020-17 and IR-2018-89.

Telephone Scams

  

 

Criminals impersonating IRS agents remain an ongoing threat to taxpayers.

 

Beginning early in the filing season, the IRS generally sees an upswing in scam phone calls (often robo-calls) threatening arrest, deportation or license revocation if the victim doesn’t pay a bogus tax bill. These con artists may have some of the taxpayer’s information, including their address, the last four digits of their Social Security number or other details.

 

One of the most brazen schemes used every year is scammers calling and claiming to represent the IRS to taxpayers and demand an immediate tax payment. Calling from a phone number that appears to belong to the IRS on your caller ID, they will threaten, badger and intimidate you into making a rash decision. Usually they will often ask for a transfer of funds by gift card or wire transfer. Thieves are increasingly extending this scheme to email and social media channels.

Taxpayers need to be very cautious of phone calls or automated messages from someone who claims to be from the IRS. Often these criminals will tell the taxpayer he/she owes money. They also demand payment right away. Other times scammers will lie to a taxpayer and say they are due a refund. The thieves ask for a bank account information over the phone. The IRS warns taxpayers NOT to fall for these scams.

IRS, Security Summit Partners warn of new twist on phone scam;

crooks direct taxpayers to IRS.gov to “verify” calls

April 2018

  

The IRS warns of a new twist on an old phone scam as criminals use telephone numbers that mimic IRS Taxpayer Assistance Centers to trick taxpayers into paying non-existent tax bills. See IR-2018-103.

Scam Alert: IRS Urges Taxpayers to Watch Out for Erroneous Refunds;

Beware of Fake Calls to Return Money to a Collection Agency

February 2018

  

After stealing client data from tax professionals and filing fraudulent tax returns, criminals use the taxpayers' real bank accounts for the deposit. Thieves are then using various tactics to reclaim the refund from the taxpayers, and their versions of the scam may continue to evolve. See IR-2018-27.

IRS-Impersonation Telephone Scams

  

A sophisticated phone scam targeting taxpayers, including recent immigrants, has been making the rounds throughout the country. Callers claim to be IRS employees, using fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling. 

Victims are told they owe money to the IRS and it must be paid promptly through a gift card or wire transfer. Victims may be threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn't answered, the scammers often leave an “urgent” callback request.

Some thieves have used video relay services (VRS) to try to scam deaf and hard of hearing individuals. Taxpayers are urged not trust calls just because they are made through VRS, as interpreters don’t screen calls for validity. For details see the IRS video: Tax Scams via Video Relay Service

Limited English Proficiency victims are often approached in their native language, threatened with deportation, police arrest and license revocation, among other things. IRS urges all taxpayers caution before paying unexpected tax bills. Please see: IRS Alerts Taxpayers with Limited English Proficiency of Ongoing Phone Scams.

If you receive a suspicious IRS-related telephone call:      

  • View your tax account information online or review their payment options at IRS.gov to see the actual amount owed.

  • If the caller is an IRS employee with a legitimate need to contact you, please call them back using the appropriate online resources.

   

If a taxpayer doesn’t owe tax or think they don’t owe any tax, they should:

REMINDER, IRS employees will NOT:

      

  • Call demanding immediate payment.

    • The IRS will not call the taxpayer without first sending a bill in the mail.

  • Demand payment without allowing the taxpayer to question or appeal the amount owed.

  • Require the taxpayer pay their taxes a certain way.

    • For example, demand taxpayers use a prepaid debit card or iTunes card.

  • Ask for credit or debit card numbers over the phone.

  • Threaten to contact local police or similar agencies to arrest the taxpayer for non-payment of taxes.

  • Threaten legal action such as a lawsuit.

Email & Text Scams: Phishing/Spoofing

  

 

Thieves have had years to refine their email trickery and have recently expanded into text messages and social media messages. Phishing scams have become much more sophisticated, with incredibly authentic-looking messages sent from credible-looking addresses that dupe victims into sharing sensitive information or installing malware. In most cases, an IRS phishing scam is an unsolicited email that claims to come from the IRS asking taxpayers to enter or confirm personal information .

 

Criminals often use fake refunds, phony tax bills or threats of an audit. Some emails actually will link you to a web site that looks real. The scammers’ goal is to have the taxpayer click on that link and give up their personal and financial information on the fake web site. If the scammer is successful, they use that information to steal a victim’s money and their identity.

Taxpayers, businesses and tax pros need to be alert for a continuing “tricky and clever” surge of fake emails, text messages, websites and social media attempts to steal personal information. Watch out for emails and other scams posing as the IRS, promising a big refund or personally threatening people. Don’t open attachments or click on links in emails.

One particularly bold scam uses the IRS name and logo to warn taxpayers about the very scam they're perpetrating, before soliciting sensitive personal information. Note that attackers are increasingly targeting tax professionals in addition to taxpayers.

Security Summit warns of new IRS impersonation email scam;

reminds taxpayers the IRS does not send unsolicited emails

August 2019

  

The IRS and its Security Summit partners are warning taxpayers and tax professionals about a new IRS impersonation scam campaign spreading nationally on email. The email subject line may vary, but recent examples use the phrase "Automatic Income Tax Reminder" or "Electronic Tax Return Reminder."

 

The emails have links that show an IRS.gov-like website with details pretending to be about the taxpayer's refund, electronic return or tax account. The emails contain a "temporary password" or "one-time password" to "access" the files to submit the refund. But when taxpayers try to access these, it turns out to be a malicious file.

 

This new scam uses dozens of compromised websites and web addresses that pose as IRS.gov, making it a challenge to shut down. By infecting computers with malware, these impostors may gain control of the taxpayer's computer or secretly download software that tracks every keystroke, eventually giving them passwords to sensitive accounts, such as financial accounts. See IR-2019-145.

IRS, Summit Partners warn on tax deadline scams, ‘IRS Refunds’ email

April 2018

  

The “IRS Refunds” scam is a common tactic used by cybercriminals to trick people into opening a link or attachment associated with the email that takes people to a fake page where thieves try to steal personally identifiable information. See IR-2018-88.

IRS continues warning on impersonation scams;

reminds people to remain alert to other scams

May 2018

  

The Internal Revenue Service warned taxpayers to remain vigilant for phishing emails and telephone scams. Summertime tends to be a favorite period for scammers because many taxpayers have recently filed a return and may be waiting for a response from the IRS. See IR-2018-129 and FS-2018-12.

   

If you receive a "phishing" or suspicious IRS-related email:      

  • Don’t reply to the message.

  • Don’t give out your personal or financial information.

  • Do not open any attachments or click on any links. They may have malicious code that will infect your computer.

  • Forward the email to phishing@irs.gov. Do not reply to the original message and and delete it immediately.

   

If a taxpayer doesn’t owe tax or think they don’t owe any tax, they should:

REMINDER, IRS employees will NOT:

      

  • Initiate contact with taxpayers via email, text messages or social media channels about a tax bill or refund.

  • Send an email or text message demanding immediate payment.​

  • Demand payment without allowing the taxpayer to question or appeal the amount owed.

  • Require the taxpayer pay their taxes a certain way.

    • For example, demand taxpayers use a prepaid debit card or iTunes card.

  • Ask for credit or debit card numbers via email, text messages or social media channels.

    • ​This includes requests for PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts.

  • Threaten to contact local police or similar agencies to arrest the taxpayer for non-payment of taxes.

  • Threaten legal action such as a lawsuit.

Refund Bait-and-Switch

 

 

This is a "new twist on an old scam." After criminals have secured your sensitive personal information, such as social security numbers and tax forms, they can easily file a fraudulent return on your behalf.

 

Once the funds hit your bank account, the scammers, impersonating someone from the IRS or a collection agent, will contact you to demand the return of the ill-gotten money -- either by depositing into an account or sending it to an address.

 

How to protect yourself: Be on the alert for an unexpected tax bill, refund, or messages from the IRS or your tax preparer about multiple returns filed using your social security number. If you get an erroneous refund -- don't go out and make a major purchase; the IRS will want its money back.

 

If you suspect you're a victim, file a complaint with the FTC; request that the major credit bureaus put a "fraud alert" on your record, and contact the IRS at 1-800-908-4490.

Home Visits

 

 

The Internal Revenue Service has created a special new page on IRS.gov to help taxpayers determine if a person visiting their home or place of business is from the IRS or an impostor.

 

​With continuing phone scams and in-person scams taking place, remember IRS employees do make official, sometimes unannounced visits to delinquent taxpayers as part of their routine casework.

 ​

The reasons these visits occur and how to verify if it is the IRS knocking at your door fall into three categories:

  •  IRS revenue officers will sometimes make unannounced visits to a taxpayer’s home or place of business to discuss taxes owed or tax returns due. Revenue officers are IRS civil enforcement employees whose role involves education, investigation, and when necessary, appropriate enforcement. Be sure to get their business card and credentials before leaving the officer in your home or business.

  • IRS revenue agents will sometimes visit a taxpayer who is being audited. That taxpayer would have first been notified by mail about the audit and set an agreed-upon appointment time with the revenue agent. Also, after mailing an initial appointment letter to a taxpayer, an auditor may call to confirm and discuss items pertaining to the scheduled audit appointment. Be sure to get their business card and credentials before leaving the agent in your home or business.

  • IRS criminal investigators may visit a taxpayer’s home or place of business unannounced while conducting an investigation. However, these are federal law enforcement agents, and they will not demand any sort of payment. Criminal investigators also carry law enforcement credentials, including a badge.

Social Security Number Scam

 

 

Criminals are making calls and threatening to suspend or cancel your Social Security number (SSN) until your overdue taxes are paid. The scam may seem legit because the caller has some of your personal information, including the last four digits of your SSN. But as the IRS puts it: "Make no mistake… it's a scam."

In the latest twist on a scam related to Social Security numbers, scammers claim to be able to suspend or cancel the victim’s SSN. It’s yet another attempt by con artists to frighten people into returning ‘robocall’ voicemails.

 

The scheme is similar to one that the IRS previously deemed "the SSN hustle.” As part of the con, scammers may try to convince you to confirm personal information, like Social Security numbers and bank account numbers, by claiming that your Social Security number may be deactivated or deleted. The threats may also suggest that you are in danger of losing your Social Security number because you owe taxes. See IRS Tax Tip 2019-149.

If you do owe taxes, you can call the IRS at 1-800-829-1040 to discuss your payment options. However, your Social Security number will not be canceled or suspended.

Offshore Tax Avoidance

 

 

Failure to report offshore funds remains a crime and many taxpayers have already voluntarily disclosed their participation in these schemes after the IRS conducted thousands of offshore-related civil audits that resulted in the payment of tens of millions of dollars in unpaid taxes and has pursued criminal charges leading to billions of dollars in criminal fines and restitution.

 

Numerous individuals have been identified as evading U.S. taxes by attempting to hide income in offshore banks, brokerage accounts or nominee entities then accessing the cash using debit cards, credit cards or wire transfers. Others have used foreign trusts, employee-leasing schemes, private annuities or insurance plans. It’s never a good idea to hide money and income offshore.

 

Taxpayers are best served by coming in voluntarily and taking care of their tax-filing responsibilities. The IRS offers the Offshore Voluntary Disclosure Program to enable people to catch up on their filing and tax obligations.

Additional Scams

 

 

Crooks Impersonate IRS to get Banking and Other Information

 

Heightened Fraud Activity as Filing Season Approaches

 

FBI Themed Ransomware Scam

Last-Minute Email Scams

 

Fictitious “Federal Student Tax” scam targeting students and parents and demanding payment

 

Automated calls requesting tax payments in the form of iTunes or other gift cards

 

Pretending to be from the tax preparation industry

REMEMBER - The IRS will NOT:

  

  • Initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information.

           ​

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.

             

  • Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

            

  • Demand payment without giving you the opportunity to question or appeal the amount they say you owe.

            

  • Ask for credit or debit card numbers over the phone.

How to Report Tax-Related Schemes, Scams, Identity Theft and Fraud

  

 

To report tax-related illegal activities, refer to the chart explaining the types of activity and the appropriate forms or other methods to use. You should also report instances of IRS-related phishing attempts and fraud to the Treasury Inspector General for Tax Administration at 800-366-4484.

Taxpayers who experience tax-related identity theft may wonder when they should file a form 14039, Identity Theft Affidavit.

also see

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CPA's specializing in small business tax and accounting with emphasis in construction and manufacturing for corporation and passthrough entities.

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