Tax scams are common. They were the most reported fraud cases to the Better Business Bureau in 2016 with more than 7,500 reported.
The BBB urges consumers to watch for these common types of tax-related scams:
Impostor scams: Scammers pose as IRS agents and instill fear in victims by demanding money or threatening jail time, even in some cases spoofing phone numbers so that the call appears to be coming from the IRS or local law enforcement.
Tax relief scams: Scammers use deceptive advertisements claiming to reduce a person’s tax liability, and use official looking IRS notices or websites to sway people into paying unnecessary money or divulging personal information.
ID theft: Scammers use stolen personal information, Social Security numbers and falsified W-2 information to file fraudulent tax returns in the victim’s name.
To protect your identity this tax season, take the following precautions.
File as early as you can. Many people are waiting for their W2 paperwork, but the sooner you file the better.
Be wary of unsolicited tax communications. Be cautious about phone calls, emails, or letters supposedly from the IRS or any official-sounding government agency. Ignore threatening phone calls from someone who claims they work for the IRS, saying that you owe back taxes and that you will be arrested if you don’t pay up immediately.
Choose a preparer carefully. Be cautious of preparers who tell you that you need to obtain other services from them - such as notary services, immigration services, or registered letter sending - in order for them to complete your taxes. Be sure to choose a qualified preparer who includes their PTIN. Beware of preparers who guarantee high value tax returns. To find a tax preparer visit bbb.org.
File electronically. If a refund is due, you can get it in less than a month by e-filing and requesting directly deposit into your account. Be careful to e-file only from secure computers. Make sure anti-virus software is up-to-date and never use public Wi-Fi to file tax returns. Don’t file taxes from a link in an email.
Use ID theft prevention measures. Don't carry your Social Security card with you, or share it just because a business or professional asks for it.
Check your credit report. It's free at the government website AnnualCreditReport.com, or by calling 877-322-8228. You will be asked for your Social Security number and date of birth for authentication purposes.
If your Social Security Number is compromised and you know or suspect you are a victim of tax-related identity theft, the IRS recommends:
- Responding immediately to any IRS notice; call the number provided or, if instructed, go to IDVerify.irs.gov.
- Completing IRS Form 14039, Identity Theft Affidavit, if your return is rejected because of a duplicate filing under your Social Security number or you are instructed to do so. Use a form at IRS.gov, then attach the form to your return and mail according to instructions.
- Continuing to pay your taxes and file your tax return until the problem is resolved.
If you previously contacted the IRS and didn't get a resolution, you can now get special assistance at 800-908-4490.
For additional information, visit the Internal Revenue website at https://www.irs.gov/uac/Taxpayer-Guide-to-Identity-Theft.