Protect Your Refund: Avoid IRS Tax Scams: The Tricks That Steal Your Refund (and How to Protect It)

To Avoid IRS Tax Scams: The Tricks That Steal Your Refund (and How to Protect It), taxpayers must recognize common schemes and employ protective measures. This guide provides actionable information to help secure your finances against fraudulent attempts targeting your tax return.

Tax season, for many, is a time of anticipation for a refund. Unfortunately, it also presents an opportunity for malicious actors to attempt scams. These schemes can range from identity theft to direct attempts to steal your refund. A proactive approach is needed to safeguard your personal and financial details. The Internal Revenue Service (IRS) is a frequent target for impersonation by fraudsters, making it necessary for taxpayers to be vigilant and informed.

Understanding Common IRS Impersonation Scams

Fraudsters often pose as IRS agents to trick individuals into divulging sensitive information or sending money. Recognizing these tactics is the first line of defense.

Phone Scams

One of the most persistent methods involves unsolicited phone calls. Scammers often use aggressive language, threatening arrest, deportation, or driver’s license revocation if an immediate payment isn’t made. They might demand payment via unusual methods like gift cards, wire transfers, or cryptocurrency. The caller ID can even be spoofed to appear as if the call originates from the IRS.

Based on our experience assisting numerous taxpayers, these phone scam attempts are particularly effective at creating panic. The fraudsters rely on the shock and fear to bypass rational thought, pushing individuals to act without verifying the claims. It’s a pattern we see repeated year after year, particularly during peak tax periods.

Email and Phishing Scams

Emails designed to look official are another common scam method. These phishing emails often contain links to fake websites that mimic the IRS or tax software providers. The goal is to collect your login credentials, Social Security number, or other personal data. These emails might claim there’s an issue with your tax return, an unexpected refund, or a need to verify your account. Clicking these links can lead to malware installation or direct data theft.

Text Message Scams

Similar to email, fraudulent text messages can also be used. These messages often include links that, when clicked, can compromise your device or lead to data entry on aimalicious site. They might promise a refund or warn of an account issue. The IRS does not initiate contact with taxpayers via text message to request personal or financial information.

How Scammers Attempt to Steal Your Refund

Beyond impersonation, direct refund theft is a significant concern. This often involves filing a fraudulent tax return in your name.

Identity Theft for Refund Claims

Identity thieves acquire your Social Security number and other identifiers to file a false tax return. They claim a refund, directing it to their own bank account or prepaid debit card. You might only discover this when your legitimate tax return is rejected because one has already been filed under your name. To prevent this, consider filing your return as early as possible once you have all your necessary documents. This makes it harder for a thief to beat you to it.

Our team frequently observes cases where taxpayers discover identity theft only when their electronic filing is rejected. This situation creates significant delays and distress. Addressing these delays requires a specific approach, and we have compiled resources to help resolve such issues. You can find more information on handling delays here: Resolve Your IRS Where’s My Refund Delays Today.

Fraudulent Tax Preparers

Some unscrupulous tax preparers might promise inflated refunds or charge excessive fees. They may even file a false return on your behalf, without your knowledge, to generate a larger refund, which they then attempt to divert or split. Always choose a reputable and credentialed tax preparer. Verify their credentials and ensure they provide you with a copy of your return before it’s submitted.

Verifying IRS Communications: What to Look For

The IRS has specific protocols for contacting taxpayers. Knowing these can help you discern legitimate communications from scams.

• Initial Contact: The IRS typically sends official correspondence via postal mail for initial contact regarding tax issues. They generally do not initiate contact via phone, email, or social media to request personal or financial information.
• Payment Demands: The IRS will not demand immediate payment without giving you an opportunity to question or appeal the amount. They will not ask for payment via gift cards, wire transfers, or cryptocurrency.
• Information Requests: The IRS will not ask for your credit card, debit card, or bank account information over the phone or via email.
• Threats: The IRS does not threaten arrest, deportation, or license revocation for non-payment of taxes.

If you receive a suspicious communication, do not respond. Instead, contact the IRS directly using their official phone numbers or website. You can find their official contact information on the Internal Revenue Service website.

Steps to Take If Targeted by a Scam

If you suspect you’ve been targeted by a scam, taking immediate action is important.

• Do Not Engage: Do not respond to suspicious calls, emails, or texts. Do not click on links or open attachments.
• Report Phone Scams: Report unsolicited scam calls to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484 or via their website.
• Report Email and Text Scams: Forward suspicious emails to phishing@irs.gov. Forward suspicious text messages to 7726 (SPAM).
• Identity Theft: If you suspect identity theft, file an IRS Form 14039, Identity Theft Affidavit. Also, contact the Federal Trade Commission (FTC) to report the identity theft and create a recovery plan.

Proactive Measures to Avoid IRS Tax Scams: The Tricks That Steal Your Refund (and How to Protect It)

Protecting yourself requires ongoing vigilance.

• File Early: Submitting your tax return as soon as you have all your documents reduces the window for fraudsters to file a fraudulent return in your name.
• Use Strong Passwords: For any online tax accounts or software, use complex, unique passwords and enable multi-factor authentication.
• Secure Personal Information: Be cautious about sharing your Social Security number or other personal data. Shred documents containing sensitive information before discarding them.
• Monitor Financial Accounts: Regularly check your bank and credit card statements for any unusual activity.
• Review Your Credit Report: Obtain free copies of your credit report annually from each of the three major credit bureaus (Equifax, Experian, and TransUnion) to look for unauthorized accounts.
• Stay Informed: Keep updated on the latest scam warnings issued by the IRS and consumer protection agencies.
• Professional Assistance: Engage with reputable tax professionals who prioritize data security. From our practical work, we recommend verifying credentials and seeking referrals.

Understanding the typical processing times for refunds can also provide a baseline for what to expect, helping you identify unusual delays that might signal a problem. For details on refund processing, refer to our comprehensive guides: IRS Tax Refund Timeline: Avoid Delays & Get Your Money Fast and Tax Refund Timeline: Exactly How Long for Tax Refund?. These resources offer timelines and insights into how long you can expect to wait for your money.

The Role of Professional Assistance

Navigating the complexities of tax regulations and protecting against scams can be challenging. A qualified tax professional offers more than just filing assistance. They provide guidance on data security, help identify potential red flags, and can assist if you become a victim of identity theft. They act as a resource, offering peace of mind during tax season and beyond. Their insight can be invaluable in helping you Avoid IRS Tax Scams: The Tricks That Steal Your Refund (and How to Protect It).

In closing, protecting your tax refund requires awareness and proactive steps. By recognizing common scams, verifying communications, and securing your personal information, you significantly reduce your risk. Staying informed and utilizing reliable resources are your strongest defenses to Avoid IRS Tax Scams: The Tricks That Steal Your Refund (and How to Protect It).

FAQ

How does the IRS typically contact taxpayers?

The IRS generally initiates contact through postal mail for most official communications. They do not typically call, email, or text taxpayers requesting personal or financial information without prior mail correspondence.

What should I do if I receive a suspicious call claiming to be from the IRS?

Do not provide any information. Hang up immediately. Report the call to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484.

Can the IRS demand immediate tax payment via gift cards or wire transfers?

No, the IRS will never demand immediate payment through gift cards, wire transfers, or cryptocurrency. They will provide options for payment and an opportunity to question or appeal.

How can I verify if an email claiming to be from the IRS is legitimate?

The IRS does not send unsolicited emails about tax issues or refunds. If you receive such an email, it is likely a phishing scam. Do not click links or open attachments. Forward it to phishing@irs.gov.

What are the signs of tax-related identity theft?

Signs include receiving an IRS notice about a tax return filed in your name when you haven’t filed one, unexpected rejection of your e-filed return, or receiving IRS letters about income you did not earn.

Is it important to file my tax return early?

Filing your tax return early, once you have all necessary documents, can help reduce the risk of identity thieves filing a fraudulent return in your name before you do.

Where can I report IRS tax scams?

You can report phone scams to TIGTA at 1-800-366-4484. Email scams should be forwarded to phishing@irs.gov. Text message scams can be forwarded to 7726 (SPAM).