The beginning of February often puts U.S. residents in a tax-paying frame of mind, as employees open their mailboxes to find W-2s, 1099s, and other tax documents. February also brings with it increased activity from scammers and thieves, as tax season presents criminals with opportunities to steal identities, tax refunds, and all sorts of personal information.
An individual’s intuition and common sense are often the first line of defense when targeted by a tax scam. IRS Commissioner John Koskinen recently backed this up when he said, “If you are surprised to be hearing from us, then you’re not hearing from us.” Unfortunately, scammers have so much data (and technology) at their disposal that it is hard to tell whether the voice on the other end of the phone is legitimate — the “agent” may be calling from an official-looking number on your caller ID, may have personal data about you, or may have sent an official-looking communication to your private email as part of a phishing expedition. In the event you do hear from someone who identifies themselves as an IRS agent, here are some things the IRS recommends taxpayers look out for:
- The IRS will never call you or demand immediate payment without first mailing you a bill. If someone calls you, ask to see a copy of the bill they mailed to your address of record.
- You have the right to question or appeal the amount you owe. The IRS will not demand payment before you have had this opportunity.
- The IRS does not care how you pay — agents will not require you to pay with pre-paid debit cards, credit cards, etc. If an “agent” is requiring you to pay your bill in a particular manner, this should be a major red flag. The IRS also does not take credit or debit card numbers over the phone – if you are asked to provide this information over the phone, alarms should be going off in your head.
- IRS agents will not threaten you with arrest by local police for unpaid taxes. The IRS has built a taxpayer “Bill of Rights” that explains the rights we all have when working with the IRS. You can find that information here: https://www.irs.gov/taxpayer-bill-of-rights
- The IRS does not initiate contact with taxpayers electronically (email, text, social media) in order to request personal or financial information. If you receive electronic communication from an “agent,” you can report the scam to firstname.lastname@example.org.
In the event you believe you are being targeted by a scammer, provide no personal or banking information to the scammer, hang up immediately, and report the incident to 800-366-4484 or to the IRS Impersonation Scam Reporting website at https://www.treasury.gov/tigta/contact_report_scam.shtml
Thieves file thousands of false tax returns claiming refunds each year, leaving surprised taxpayers with IRS-related nightmares when they find multiple returns filed under their Social Security number. The IRS, state treasuries, and software vendors have enacted safeguards to protect against fraudulent filings, but they still happen. Here are the IRS-identified warning signs:
- Multiple returns are filed under your SSN.
- You owe tax or a collection attempt is made against you for a year in which you did not work and had no tax reporting obligation.
- IRS records indicate you received income or other benefits from an employer you never worked for.
In the event one of these things happens to you, continue reporting and paying your taxes as required, even if that means filing paper returns. You may then have to file a complaint with the Federal Trade Commission at www.identitytheft.gov; complete IRS Form 14039, Identity Theft Affidavit; contact financial institutions about fraudulent activity; and/or take steps to freeze your credit (which you can read about here).
The best defense against all sorts of crimes is to be aware of your surroundings. Identity theft is no different. Take advantage of software that uses encryption, firewalls, and/or anti-virus protection, and use strong passwords. Do not access sensitive information over public internet signals, open attachments from unknown email sources, or share payment information over the phone with someone claiming to be an agent of the IRS. The tax filing process is painful enough, there is no need to add to the angst by taking chances with your security.