Avoid Getting Scammed During Tax Season

Avoid Getting Scammed During Tax Season

Dennis Snider

379 Posts



According to an FTC report, more consumer complaints are made about tax imposter scams than any other form of fraud. It is estimated that $488 million was lost to tax imposter scams in 2018.

One form of imposter scam is contact by telephone or email trying to get hold of your Social Security number. There are various ways the imposter can claim they need this number: they may claim to be from the Justice Department chasing up unpaid taxes, or from the IRS telling you that you are owed a refund. They will say that they need your Social Security number and bank account details for confirmation of your identity; once they have these details, they can put in fake tax returns and wrongfully access any refunds that should be coming to you.

A more aggressive type of scam is to threaten you with sanctions ranging from suspension of driver’s license to arrest, imprisonment, or deportation unless you pay a fictitious tax bill (some may even be for taxes that don’t exist: students have been scammed by callers threatening them with sanctions unless they immediately pay the “federal student tax”). You will be told that you must pay immediately by debit card, wire transfer, or gift card – that alone should be enough to alert you to a scam, as the scammers are trying to get your funds instantly so they can be withdrawn before any complaint is made. Such scammers can appear very convincing, particularly if they managed to manipulate the caller ID system so that it looks as though they’re coming from an official department.

The IRS has issued a number of guidelines for protecting yourself against such fraud.

Firstly, hang up on anyone who asks for your Social Security number, insists on instant payment, or threatens you with arrest for not paying your taxes. The IRS will never do any of these things. Make sure that you keep your data safe and secure: don’t give out your Social Security information to any but trusted and verified businesses, and store your Social Security card somewhere safe at home when you don’t need it to minimize the risk of it being stolen. Make sure your computer is running current antivirus software with a firewall to ensure that hackers can’t get your personal information.

Finally, one of the best protections against tax fraud is to make sure you file early: once you’ve got your legitimate tax return in, the IRS will know to reject any subsequent filings.