Tax season is underway, and after a year with soaring inflation and rising interest rates, many consumers are looking forward to a tax refund to help cover their expenses.
Unfortunately, fraudsters have been known to target tax season for various scams looking to make a quick buck from unsuspecting victims.
Here are tips to help protect yourself from tax scams as the April filing date approaches.
Red Flags to Look Out For
IRS impersonator scams are nothing new, but fraudsters continue to get more sophisticated in how they target their victims. Beware of suspicious emails, text messages, phone calls and mail claiming to be from the IRS or another government agency.
Scammers have been known to spoof legitimate phone numbers, email addresses and more, so avoid clicking any unsolicited links and if you receive an unexpected call, hang up. The IRS will contact you by mail first if you owe taxes, so an unexpected call should be an immediate red flag.
Fraudsters will often use threatening language and stress that you need to act immediately to avoid negative consequences. Threatening language or being asked to make immediate payment via gift card, prepaid debit card, wire transfer or more, are warning signs of a scam. Hang up and call the number listed directly on the IRS website to report the fraudulent call.
Know Who You’re Working With
There are many great tax professionals out there to help with filing your taxes as well as user-friendly online services, but it is important to do your research before working with any individual or company on your taxes.
Anyone paid to help with your taxes is required by law to have a valid Preparer Tax Identification Number (PTIN) and must include this number and their signature on the tax return. If the person you’re working with refuses to sign the return or provide their PTIN, this is a red flag that they may be scamming you to get your personal information or obtain a fee for improperly done returns.
Before working with anyone on your taxes – or anything involving your finances and personal information – consider asking close friends or loved ones for recommended professionals they might use and ensure you’ve verified their credentials before providing any personal information.
If You’ve Been Scammed
If you’ve been the victim of a tax scam, here are steps you should take immediately:
- Report the scam on the IRS Impersonation Scam Reporting website or call the IRS directly using the phone number from their verified website, file a police report as well as a report with the Federal Trade Commission.
- Contact the Social Security Administration if your Social Security number has been compromised.
- Place a fraud alert on your credit reports with Equifax, Experian and TransUnion.
- Contact your bank and credit card companies to put a stop payment on your accounts and obtain new account numbers if this information has been compromised.
Being the victim of a scam can be scary, but with the right vigilance, you can help protect yourself and your finances from nefarious actors.
That is a CISO perspective.
Helping you boost your financial intelligence.
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