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Increasing Tax Scams – Know What To Do

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In the past weeks a few of our clients had to deal with the ramifications and hassle of tax scams.  Unfortunately, they are on the rise.  The IRS saw an approximate 400% surge in phishing and malware incidents in the 2016 tax season.  Knowing how to recognize tax scams and what to do about them is very important.

Here are a few examples of recent scams that have been reported to the IRS and what to do should you be a victim.

  1. Fake IRS tax bills related to the Affordable Care Act

This scam involves an email that includes a fraudulent version of a CP2000 notice for tax year 2015 as an attachment.  It includes a payment request where taxpayers are supposed to mail a check made out to “I.R.S.” to the “Austin Processing Center” at a post office box address.  The payment voucher lists the letter number as 105C.  This is in addition to a “payment” link within the email itself.

What you need to know

An authentic CP2000 notice is used when income reported from third-party sources such as an employer does not match the income reported on the tax return.  Unlike the fake, it provides extensive instructions to taxpayers about what to do if they agree or disagree that additional tax is owed.  A real notice requests that checks be made out to “United States Treasury”.  And, lastly, the CP2000 is a notice commonly mailed to taxpayers through the United States Postal Service.

  1. Email phishing scam: “Update your IRS e-file”

In recent months, people have been receiving email phishing scams that appeared to be from the IRS and included a link to a bogus website intended to look just like the official IRS website.  The subject line for the fraudulent email is “Security Awareness…” and the “From” line is “Your e-Services Team”.  It has both an IRS logo and an e-services logo that hyperlinks to a URL verified as a phishing site.  Users are being asked to update their e-service account immediately to ensure protection of their information.  Then it asks them to click on the login to access their accounts for security upgrade.  The emails mention USA.gov and IRSgov (without a dot between “IRS” and “gov”).  Don’t get scammed.  These emails are NOT from the IRS.

What you need to know

Scam emails are designed to trick taxpayers into thinking these are official communications from the IRS, and when people click on these email links, they are taken to sites imitating an official-looking website, such as IRS.gov.  The sites ask for social security numbers and other personal information, which could be used to help file false tax returns.  The sites also may carry malware, which can infect people’s computers and allow criminals to access your files or track your keystrokes to gain information.

If you receive one of these emails, do NOT respond to the email or click on the links.  Instead forward the scam emails to the IRS at phishing@irs.gov and then delete it from your email account.

  1. Tax refund scam: “Artists posing as Taxpayer Advocacy Panel”

According to the Taxpayer Advocacy Panel (TAP), taxpayers have been receiving emails about a tax refund that appear to be from TAP.  These, as well, are phishing scams where scammers try to trick unsuspecting victims into providing personal and financial information.

What you need to know

A very important fact to remember is that the IRS does NOT initiate contact with taxpayers by email to request personal or financial information.  This includes any type of electronic communication such as text messages and social media channels.  Further, TAP is a volunteer board that advises the IRS on systemic issues affecting taxpayers.  It will never request nor does it have access to any taxpayer’s personal and financial information such as social security and PIN numbers.

  1. Telephone scams

In August this year, students and parents were targeted during back-to-school season for payment of a non-existent “federal student tax”.  So called “robo-calls” are also quite frequent.  Scammers leave urgent callback requests through the phone telling taxpayers to call back to settle their “tax bill”.  They also claim to be the last warning before legal action is taken.  Once the victim calls back, the scammers may threaten to arrest, deport or revoke the driver’s license of the victim if they don’t agree to pay.  The latest payment trend has been to pay on iTunes and other gift cards.

What you need to know

In general, the IRS will first mail you a bill if you owe any taxes. But if you do get a phone call from someone claiming to be from the IRS and asking for money, here is what you should do:  Do not give out any information and hang up immediately.  Next, search the web for telephone numbers scammers leave in your voicemail asking you to call back.  Some of the phone numbers may be published online and linked to criminal activity.  You may also contact TIGTA to report the call at 800-366-4484 or use their “IRS Impersonation Scam Reporting” web page.  Another option would be to report it to the Federal Trade Commission.  Use the “FTC Complaint Assistant” on FTC.gov and add “IRS Telephone Scam” in the notes.

Below is a summary of what the “IRS will never do” and how you can be sure it’s a scam:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. In general, the IRS will first mail you a bill if you owe any taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Ask for credit or debit card numbers over the phone.
  • Verify tax return information over the phone.

If you keep this in mind, scam artists will have a much harder time making YOU their next victim.


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