Each year, the Internal Revenue Service issues a list of “Dirty Dozen” tax scams that can affect taxpayers. This year, the list again runs the gamut from schemes involving taxpayer participation (hiding offshore income) to schemes that taxpayers may know nothing about (identity theft).
While taxpayers can be targeted by scams throughout the year, the IRS often sees a peak during filing season as people prepare their tax returns.
In particular, IRS Commissioner John Koskinen warns taxpayers to be extra vigilant, noting, “These schemes jump every year at tax time. Scams can be sophisticated and take many different forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues.”
1. Identity Theft. Identity theft which results in tax fraud tops the IRS Dirty Dozen list again. Identity theft, when someone uses your personal information such as your name, Social Security number (SSN) or other identifying information, without your permission, is often used by scammers to fraudulently file a tax return and claim a refund.
The IRS considers combating identity theft and refund fraud a top priority and has been taking steps to boost fraud prevention, early detection and victim assistance.
If you believe you are at risk of identity theft due to lost or stolen personal information, contact the IRS Identity Protection Specialized Unit at 800-908-4490 or visit the IRS’ special identity protection page.
2. Pervasive Telephone Scams. It’s no surprise to see phone scams near the top of the list. The IRS has reported an increase in phone scams across the country, with callers pretending to be from the agents or other IRS representatives in hopes of stealing money or identities from victims.
There are a number of variations on a theme ranging from instances from where callers say the victims owe money or are entitled to a huge refund to calls which threaten arrest. Callers may be targeting immigrants or calling after hours or during times when it might be inconvenient to contact the IRS for verification (as happened during the shutdown). The IRS has noted a few patterns in these calls such as:
Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.
Scammers may be able to recite the last four digits of a victim’s Social Security Number.
Scammers “spoof” or imitate the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.
Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.
Victims hear background noise of other calls being conducted to mimic a call site.
After threatening victims with jail time or a driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.
If you get a phone call from someone claiming to be from the IRS and you’re not sure and you have a legitimate tax issue outstanding, call the IRS at 1.800.829.1040. If you get a phone call from someone claiming to be from the IRS and you know you don’t owe taxes, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484.