How Can You Avoid the Most Common Scams This Tax Season?

The deadline for filing your income tax return with the IRS is just around the corner… and the scammers are following close behind. Here are some ways you can avoid becoming a victim of fraud.

After April 15, criminals impersonating IRS agents ramp up their efforts to coerce unsuspecting taxpayers into sharing extremely sensitive personal information or trick them into sending them money for taxes or penalties that they don't actually owe. You can reduce your risk of becoming a victim by learning what potential tax scams look like and how to shut them down.

“Phishing” Emails and “Smishing” Texts

What it looks like: “Phishing” emails and “smishing” text messages are designed to steal your personal information. Scammers will send you a message pretending to be from the IRS, demanding urgent updates to important tax forms or claiming that there’s either a refund waiting for you or a tax bill that needs immediate payment. If you click on the link they send you, you’ll end up on a page that might look like the IRS website, but it is not. Any information you share – your social security number, birthdate or bank account numbers — can be used by a scammer to empty your accounts, open credit cards in your name or even file an amendment to a phony tax return.

How to shut it down: The IRS never, ever sends messages via email, text or social media. If you receive an email, hover over or click on the “from” name. It will reveal their actual email address… And if it is not from an address that ends in “.gov,” you’ve got proof that it’s a scam. Forward any email or text messages that claim to be from the IRS to phishing@irs.gov.

Telephone Calls Stating You Made an Error on Your Tax Return

What it looks like: The caller may stress “urgency” and demand a prepaid debit card, wire transfer or credit card number for immediate payment. Noncompliance – according to the caller – could mean the target will lose their driver’s license, ruin their credit score or even be arrested.

How to shut it down: Be aware that when the IRS contacts people about unpaid taxes, they do it by postal mail, not by phone. Additionally, the IRS doesn’t accept prepaid debit cards or wire transfers for payment, nor will they ask for credit card numbers. Don’t be surprised if you quickly receive a second phone call from the same scammer, claiming to be a representative from the police or Department of Motor Vehicles and repeating the same empty threats. Handle all of these calls the same way: hang up. Then, contact the Federal Trade Commission via the “FTC Complaint Assistant” on FTC.gov. (Add "IRS Telephone Scam" as your message’s subject line.)

Hand-Delivered Letters Stating You Are Entitled To An “Unclaimed Refund”

What it looks like: The IRS is warning taxpayers about a new scam that uses old-school tactics to target senior citizens. Someone who looks like a delivery person knocks on your door and hands you an official-looking envelope that appears to be from the IRS. The letter inside says that you’re entitled to an unclaimed tax refund. Of course, to collect it, you just need to send a photo of your driver's license and confirmation of your bank routing numbers, social security number, cell phone number and more – all in an email to an “IRS agent.”

How to shut it down: These phony letters are designed to lure you into sharing sensitive personal information that will be used for identity theft or tax fraud. Like many scams, the letter will include contact information and a phone number that do not belong to any office at the IRS. Other red flags include awkwardly worded sentences, misspellings, improper punctuation, strange fonts, and outdated or wrong tax information and filing deadlines. If you receive a suspicious letter, do not contact the number on the letter. Instead, report the potential scam to phishing@irs.gov.

The IRS publishes a list of the “worst of the worst” tax-related scams every year. Check out the IRS Dirty Dozen list now – because being informed is always your best protection. Remember: if it seems too good to be true, it probably is. If you're not sure whether a communication from the IRS is real, try contacting the agency on your own at 800.829.1040.

Questions? Contact David Toll in Drexel’s Office of Gift Planning at 215.895.1882 or giftplanning@drexel.edu.