In the fiscal year 2022, the IRS Criminal Investigation identified over $31 billion from tax and financial crimes. Now that the 2023 tax season is in full swing, so are the common scams that occur this time of year. We are faced with a higher risk of income tax scams, identity theft, and more. As we continue to see a rise in tax scams, taxpayers must remain aware of the latest methods used by criminals to avoid falling victim.

6 Common Scams Targeting Taxpayers

• During a phone scam, a cyber criminal will pose as an IRS agent creating a false sense of urgency in hopes that the taxpayer will reveal sensitive information or send money.
• In the latest SSN scam, threat actors aim to create panic by threatening to suspend or cancel a taxpayer’s social security number for an unpaid tax bill. 
• Text message scams may contain attachments or links to fraudulent IRS websites and documents requesting the recipients enter sensitive information, such as their social security number, birthday, license number, or address in order to submit a fake form.
• Taxpayers may experience tax return fraud or fraudulent unemployment claims filed by criminals using their identity to collect tax returns or benefits.
• Threat actors use phishing emails to request personal or financial information from taxpayers or to encourage them to complete fake tax forms. 
• The IRS requires anyone who is paid to prepare or assist in preparing a federal tax return to sign the return including their Preparer Tax Identification Number (PTIN). Ghost preparers refuse to sign tax returns they prepare and may charge a higher fee by promising a large refund. They are typically looking to make a quick profit and may require payment in cash only, claim fake deductions to increase the size of the refund, or even direct the refund into their bank account. 

Tips to Avoid Scams During Tax Season

Spot phone scams and phishing emails.

Keep in mind that the IRS will typically mail taxpayers their bill first. They will not leave a threatening call or pre-recorded voicemail, ask for a check to a third party, or demand an immediate payment. Beware of emails that appear to come from a credible source, such as your bank or tax provider; never click on any links or attachments before confirming the source is reliable.

File your taxes early.

If the IRS has already received your information, the chance that a scammer will use your identity to file taxes for you or claim unemployment benefits is less likely. File your taxes as early as possible to reduce your risk.

Do your research when selecting a tax preparer.

To avoid suspicious tax preparers and scammers, ask for trusted recommendations from friends and family. You can also check a tax preparer’s credentials using the IRS’ Directory of Federal Tax Return Preparers.

Don’t fill out fake forms.

Scammers will often retrieve sensitive information by luring taxpayers into filling out fake tax forms. Threat actors are currently using a fake Form W-8BEN, a U.S. tax exemption document, to acquire personal information from taxpayers, such as their mother’s maiden name, passport number, PIN numbers, or passwords.

Look up form numbers on the IRS website to confirm the legitimacy of a tax form before filling it out.

Keep in mind, the IRS will never…

• Contact taxpayers by email or text message requesting personal or financial information.
• Demand payment over the phone using a payment method such as a prepaid debit card, gift card, or wire transfer.
• Make threats to have local law enforcement arrest the taxpayer.
• Demand payment without allowing the taxpayer to question or appeal the amount they owe.
• Call taxpayers unexpectedly regarding their tax refund.

To learn more about how and when the IRS contacts taxpayers, click here.

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