It may be tax season, but it’s also scam season. According to the Internal Revenue Service (IRS), one million tax returns were flagged for potential identity theft—and that’s just the ones they caught. Criminals gather a victim’s personal information to file a claim for their federal tax refund.
1) Unclaimed Refund Scam
Criminals will say you have an unclaimed tax refund waiting for you. They'll mail you an official letter which includes the IRS masthead and phone number. It will ask you to provide personal details so you can claim your refund.2) ‘Ghost’ Tax Preparer Scam
These tax preparers or “ghost preparers” don’t sign your tax return. These bogus preparers guarantee they can double your refund. For your convenience, they say they'll manage everything online. The ghost preparers charge based on the size of your refund.But often you end up in trouble with the IRS because the deductions they take to inflate the refund are fraudulent.
3) Refund Calculation Scam
In this scam, a criminal will contact you. They’ll say they’re from the IRS and they’ve recalculated your federal refund, and you are due more money.They will then ask for personal information and banking details to “expedite the return process.”
4) Tax Lien
The tax lien scam threatens you if you don’t pay taxes. The crimianals will pose as a fake agency. It’s usually called something like the “Bureau of Tax Enforcement.” If you don’t pay the tax they say you owe, they will put a lien on your property.This scam is run by mail. If you receive one, scan the letter and contact [email protected] and report it.
5) Offer in Compromise
These scammers offer to help you eliminate 100 percent of your tax debt. This is an offer in compromise (OIC) tax scam.They trick you into paying upfront fees with the promise of settling your IRS debt. Once you pay the fee, they disappear.
6) Employee Retention Credit Scam
This scam targets businesses. Third-party promoters usually send direct mail about the employee retention tax credit (ERTC). Criminals exaggerate who qualifies for the credit and charge large upfront fees to process the claim.Fraudsters will often pressure you to apply by saying there is nothing to lose.
They will apply for you even if you don’t qualify. But the problem is if you don’t qualify and receive the credit, you’ll have to pay it back. That includes paying penalties and interest. Plus, you’ll be out the fee you paid the scammer.
7) IRS Account Sign-Up
You should set up an IRS account online. It will give you valuable information, like your payment history and a tax transcript.You can manage your IRS payment through the system.
- Social Security number
- tax identification number
- photo ID
How to Know a Scammer
If you have an unsolicited phone call or email from the IRS, it’s a scam. The IRS doesn’t email or call taxpayers. Always contact the IRS if you receive an “official” looking form or letter from them.The IRS doesn’t demand immediate payment, they have a process they go through when collecting taxes.
Watch Out for Nefarious Criminals
The IRS doesn’t contact you by phone or email. They may send a registered letter, but even that should be confirmed before action is taken. Be suspicious of any correspondence from the IRS.Anyone who requires fees to represent you to the IRS should be met with suspicion. You can deal with the IRS directly on all matters.
The best course of action is to work with a qualified and experienced certified public accountant (CPA) or accountant when preparing your taxes or dealing with the IRS.
