Doing your taxes is stressful enough, but this time of year you also have to be extra vigilant about IRS-impersonation scams.
“The uncertainty and stress of tax season was already fertile ground for scammers,” said Max Eddy, senior security analyst at PCMag. “Unfortunately, the ongoing COVID-19 pandemic has only created more opportunities for nefarious schemes.”
One of the best ways to avoid a scam of any kind is to slow down and verify everything. Scammers succeed in part by rushing you.
“They’ll often demand immediate payment or set an arbitrary deadline to scare people into giving in,” Eddy said.
Here is a look at some of the most common tax scams and how to avoid them.
With a phishing scam, a thief tries to trick you into handing over your personal data by getting you to enter passwords or account information on phony websites. They may even try to get this information over the phone by posing as the IRS.
How to protect yourself: Never clink on a link in an email unless you’re absolutely sure what the link is and who the email is from. Instead, type in the website yourself to go directly to the forms or information you need.
You should also double check the URL of any site you’re being directed to. In the case of the IRS, “if the URL doesn’t include IRS.gov, then it’s fake,” Eddy said. Report phishing scams at email@example.com.
Scam artists often leave threatening robocall messages or emails pretending to be the IRS, warning of arrest, deportation, or even that your Social Security number will be canceled if you don’t pay up or take some action.
“Be skeptical of threats, time limits, or demands for immediate action,” Eddy said. “If you receive notice of a sudden crisis that can only be solved by an immediate wire transfer, that’s probably a scam.”
How to protect yourself: The IRS will mainly communicate with you by mail, although they may sometimes call. But they won’t demand immediate payment or threaten you.
Here’s a rundown on what the IRS will or won’t do and how to tell when you’re dealing with the real thing.
Unemployment benefits fraud
With millions of people out of work because of the pandemic, scammers have turned additional attention to unemployment benefits. Some people have reportedly discovered that someone had applied for, and in some cases, received unemployment benefits in their name.
How to protect yourself: If someone fraudulently applied for unemployment benefits in your name, report that to the IRS. Only report the income you personally received on your tax form.
Tax rebate and Economic Impact Payment fraud
Scam artists have long dabbled in tax refund fraud and last year they added Economic Impact Payments — or stimulus checks — to their bag of tricks. Scammers might call or email you claiming that they’re from the government and need more information before sending your tax refund or stimulus check.
Some scammers file phony tax returns in your name to get a hold of your tax refund check. In other cases, they might call or email you claiming that you need to pay a small fee to receive your tax refund or Economic Impact Payment.
How to protect yourself: Protect your personal information as much as possible. That means making sure your WiFi is password protected and that you don’t share personal information on public networks. Also know that the IRS won’t call you about an unexpected tax refund or Economic Impact Payment. When in doubt, call the IRS directly.
Ghost tax preparers
It’s important to choose someone reputable and knowledgeable to prepare your taxes. That’s because you’re responsible for what’s on your tax return even if you didn’t prepare it.
There are also scammers who pose as tax pros and specialize in tax return fraud. They might claim tax credits that you don’t qualify for to beef up your tax refund and demand a percentage or reroute your tax refund to their bank account. Many of these shady preparers are known as “ghost preparers,” because they don’t sign the returns they prepare, which is required by law.
How to protect yourself: Only work with trusted tax preparers and don’t accept an unsigned tax return. The IRS offers tips for how to find a reputable tax preparer, including a directory of credentialed pros.
Natural disasters, or widespread emergencies like COVID-19, offer opportunities for scammers to solicit donations via fake charities. Often they’ll use websites or email addresses with similar names to legitimate charities.
How to protect yourself: Before donating to a charity, ask for the organization’s Employer Identification Number (EIN). You can use an EIN to search for tax-exempt organizations on the IRS website.
What to do if you think you’ve been scammed
If you think you’ve been the victim of a tax-related scam, report it to the IRS and the police. If you can prove you're the victim of identity theft, ask for an Identity Protection PIN to file your federal tax return. That prevents anyone else from filing a return in your name in the future.
“And remember that tax scams don’t stop after the filing deadline,” Eddy said. “Your money and personal information are always valuable, even after tax time.”
Read more information and tips in our Taxes section