How to avoid tax scams this filing season

Tax filing season is underway and scammers are looking to take advantage of unsuspecting taxpayers through a variety of ever-evolving scams seeking money and personal information.

The International Association of Better Business Bureaus warns that tax scams typically originate with a phone call and tend to fall into two categories. 

In one, the supposed IRS agent tells the would-be victim that they owe back taxes and attempts to pressure them into paying with a prepaid debit card or wire transfer, threatening an arrest and fines for noncompliance.

The other popular tax scam tactic involves the scammer claiming they’re issuing tax refunds and asking for personal information to send the would-be victim their refund. That information may later be used for identity theft, and in the case of college students, they may be targeted with a claim that their “federal student tax” hasn’t been paid.

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The BBB report notes that tax scammers may engage in a number of tactics to try to appear legitimate. They may give a fake badge number or name, and the caller ID may indicate that the call is coming from Washington, D.C., or use a serious “robocall” recording that sounds official.

Scammers may also send a follow-up email that uses IRS logos and colors along with language that makes the email appear legitimate.

When con artists attempt to target victims, they may try to push the would-be victim into taking action immediately before they have a chance to ask questions or otherwise process the information the scammer is throwing at them. 

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They may also demand payment through methods like wire transfers, prepaid debit cards, or other non-traditional methods because those are harder to reverse or trace. The real IRS will never demand immediate payment, require a specific form of payment, or ask for a credit or debit card number of the phone.

The BBB notes that the IRS will allow taxpayers to ask questions or appeal any amount of back taxes they owe.

Additionally, the IRS always initiates contact by mail – not by phone calls, texts, emails or social media – so taxpayers aware of that can be better prepared to parry a scammer’s attempts via phone or email. After the IRS sends a mailed letter to a taxpayer with outstanding debts, they may reach out by phone.

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The IRS has also warned taxpayers about a mailing scam that attempts to trick victims into thinking they have a tax refund. 

Taxpayers receive a cardboard envelope with a fake letter that purports to be from the IRS regarding an unclaimed refund, which requests the taxpayer provide personal and financial information.

BBB recommends that taxpayers in doubt about whether phone calls or other outreach are legitimately from the IRS should contact the agency directly to tell them about the claims and request, which should allow them to confirm whether it was actually the IRS reaching out.

It also suggests filing taxes as early as possible to avoid the threat of identity theft, as a scammer could attempt to use your information to file a fake return.