Tax Time Is the Perfect Time for Scammers to Steal Your Identity and Tax Refund

Cybercriminals are ever evolving and make use of sophisticated scams to trick people into divulging sensitive data

Email phishing scams
Image: NCCC
March 20, 2017

The Internal Revenue Service (IRS) is warning taxpayers of a variety of scams, especially those requesting last-minute deposit changes for tax refunds or account updates.

Tax scams at peak near filing deadline

While tax scams can happen during any part of the year, they typically reach their peak just prior to the filing deadline. It's during this time that you need to be extra cautious so you don't have your identity or refund stolen.

Fake IRS Emails and Websites

Fake emails disguised as official correspondence from the IRS try to steal sensitive information. It's a phishing scam, which happens when an unsolicited email or a website poses as a real email or website in order to get victims to provide sensitive information, such as user names, passwords, ID numbers, account numbers, and more. Armed with this valuable information, a criminal can commit identity theft or financial fraud.

software update ploys

You might see an email arrive advising you of the need to update your tax software prior to submitting your return or a client's return. Links are provided to download a file, which doesn't contain an update at all but instead a tiny program that runs hidden on your computer that collects your keystrokes. Criminals use this software to gain access to your account passwords.

Scam Phone Calls

Criminals can alter the telephone caller ID to make it seem like an IRS or other agency is calling. They use fake names, titles and badge numbers. They use online resources to get your name, address and other details about your life to make the call sound official. Some claim that two certified letters were mailed to the taxpayer were returned as undeliverable. Many of these criminals will copy official IRS letterhead for use in email or regular mail. The IRS will communicate in writing.

Most Vulnerable People Are Targetted First

Scammers posing as IRS agents typically first target those they view as most vulnerable, such as older Americans, newly arrived immigrants and those whose first language is not English. You should communicate with friends and family who might be vulnerable and advise them not provide any sensitive information to someone who calls, emails, text messages, or sends a social media message claiming to be from the IRS. The IRS will communicate in writing.

if someone asks you to Make immediate payment

Some criminals will provide their victims with directions to the nearest bank or business where the victim can obtain a means of payment, such as a debit card or gift card. The criminal then asks you to provide the debit card or gift card number and then empties the card of money. Once this happens, it's impossible to get your money back. If someone advises you to prepare money in this way, you're dealing with a criminal.

threats to scare you into immediate action

Criminals often angrily threaten police arrest, deportation, license revocation or other similarly unpleasant things in an attempt to pressure you into making an immediate action without taking time to think. They may also leave 'urgent' callback requests through robocalls, phone or email. The emails will often contain a fake IRS document with a telephone number or email address for your reply.

IRS agents won't threaten you to get their money. They have other legal and more efficient means of collecting any money owed to them. If someone is making threats in order to get money, you're dealing with a criminal.

Police officers do not have any authority to arrest you over debts owed.

signs of a phishing message

Each phishing message is unique and some disguise themselves better than others. But there are some phrases that are typically used that entice unsuspecting recipients into the trap. These key phrases to watch our for include:

  • e-Service Account is Blocked
  • Few Hours to Close Your Account
  • Your Account is Closed
  • Your Account is Terminated
  • 24Hrs to Block Your Account

If You Receive A Suspicious Email, text message or social media message

If you get an unsolicited email that appears to be from the IRS, delete it. The IRS doesn't conduct its business via email, text messages or social media channels to request personal or financial information. Any links to websites within those emails will almost certainly take you to a phishing website. An alternative to deleting the email would be to mark it as spam. Some email clients, such as Gmail, have the option to report the email as a phishing email, which helps to protect other users on the network.

Fowarding suspicious emails to the IRS

The IRS recommends forwarding suspicious emails to them as attachments. But we don't agree.

In order to forward an email, you need to open it. When you open an email that is from a scammer or spammer, or even emails from a legitimate sender, there are often pieces of code in it that signal to the sender that the email was opened and that your email address is valid. You could be opening the door to even more emails.

When you open an email in order to forward it as an attachment, you also run the risk of inadvertently clicking a link or downloading a piece of malicious software to your computer.

the irs will never...

  • Angrily demand immediate payment over the phone or call about taxes owed without first having mailed you a bill;
  • Threaten you with local police or other law-enforcement groups to have you arrested for not paying;
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe;
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card or gift card; or
  • Ask for credit or debit card numbers over the phone.

If you think you're dealing with a scammer

  • If you actually owe taxes, call the IRS at (800) 829-1040. IRS workers can help you with a payment issue.
  • If you know you don't owe taxes or do not believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at (800) 366-4484.
  • File a complaint with the Federal Trade Commission (FTC). Please add "IRS Telephone Scam" or other suitable descriptor to the comments of your complaint.

If you need to access any part of the irs website

Whether you are a tax professional completing returns for the public or your average Joe completing your own return, you may need to access IRS e-Services or some other information on the IRS website. The best way to avoid phishing is to directly type the IRS.gov website into your web browser. You should NOT click any links in suspicious emails or third-party websites.

If you click a link in an email or third party website that appears to go to one place, it might end up going to another place altogether. Want to try it out safely? Click this hyperlink to IRS.gov, which really goes to a (great) article on our website about Nissan vehicles. Before you start calling us or sending emails... Yes. We do know that we just said not to click links in third party websites!

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