Tax Scams

IRS Warns of Tax Scams

Thousands of people have lost millions of dollars and their personal information to tax scams.
Scammers use the regular mail, telephone, or email to set up individuals, businesses, payroll and tax professionals.

The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Recognize the telltale signs of a scam.

Tax season is prime time for phone scams

IRS-Impersonation Telephone Scams

With the new tax season starting, the IRS reminds taxpayers to be aware that criminals continue to make aggressive calls posing as IRS agents in hopes of stealing taxpayer money or personal information. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.

Victims are told they owe money to the IRS and it must be paid promptly through a gift card or wire transfer. Victims may be threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn't answered, the scammers often leave an “urgent” callback request.

The IRS will never:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
Demand payment without giving you the opportunity to question or appeal the amount they say you owe.
Call unexpectedly about a tax refund.

Taxpayers who receive these phone calls should:

Record the number and then hang up the phone immediately.
Report the call to TIGTA using their IRS Impersonation Scam Reporting form or by calling 800-366-4484.
Report the number to phishing@irs.gov and be sure to put "IRS Phone Scam" in the subject line.

Scams Targeting Tax Professionals

With tax season in full swing, the Internal Revenue Service, state tax agencies and tax industry warns tax professionals of new email scams that attempt to steal their tax software preparation credentials.

Security Summit partners warned these scams serve as a reminder that tax professionals remain prime targets for thieves. These thieves try to steal client data and tax preparers' identities in an attempt to file fraudulent tax returns for refunds.

A recent phishing email uses the IRS logo and a variety of subject lines such as "Action Required: Your account has now been put on hold." The IRS has observed similar bogus emails that claim to be from a "tax preparation application provider." One such variation offers an "unusual activity report" and a solution link for the recipient to restore their account.

"Scams continue to evolve, and this one is especially sinister since it threatens tax professional's accounts," said IRS Commissioner Chuck Rettig. "Tax professionals must remain vigilant in identifying and staying clear of these IRS impersonation emails. A little extra care can protect the tax professionals and their clients."

Tax professionals should review Publication 4557, Safeguarding Taxpayer Data, A Guide for Your Business, which provides a checklist to help safeguard information and enhance security. Read "Protect Your Clients; Protect Yourself" for more detailed information.

Soliciting Form W-2 information from payroll and human resources professionals.

The IRS has established a process that will allow businesses and payroll service providers to quickly report any data losses related to the W-2 scam currently making the rounds. If notified in time, the IRS can take steps to prevent employees from being victimized by identity thieves filing fraudulent returns in their names. There also is information about how to report receiving the scam email.

Report these schemes:

Email dataloss@irs.gov to notify the IRS of a W-2 data loss and provide contact information. In the subject line, type “W2 Data Loss” so that the email can be routed properly. Do not attach any employee personally identifiable information.
Email the Federation of Tax Administrators at StateAlert@taxadmin.org to learn how to report victim information to the states.
Businesses/payroll service providers should file a complaint with the FBI’s Internet Crime Complaint Center (IC3.gov). Businesses/payroll service providers may be asked to file a report with their local law enforcement.
Notify employees so they may take steps to protect themselves from identity theft. The FTC’s www.identitytheft.gov provides general guidance.
Forward the scam email to phishing@irs.gov.
See more details at Form W2/SSN Data Theft: Information for Businesses and Payroll Service Providers.

Employers are urged to put protocols in place for the sharing of sensitive employee information such as Forms W-2. The W-2 scam is just one of several new variations that focus on the large-scale thefts of sensitive tax information from tax preparers, businesses and payroll companies.

Tax professionals who experience a data breach also should quickly report the incident to the IRS. See details at Data Theft Information for Tax Professionals.

Surge in Email, Phishing and Malware Schemes

Phishing (as in “fishing for information”) is a scam where fraudsters send e-mail messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victims’ identity.

The IRS has issued several alerts about the fraudulent use of the IRS name or logo by scammers trying to gain access to consumers’ financial information to steal their identity and assets.

Scam emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. These phishing schemes may seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information.

Be alert to bogus emails that appear to come from your tax professional, requesting information for an IRS form. IRS doesn’t require Life Insurance and Annuity updates from taxpayers or a tax professional. Beware of this scam.

Variations can be seen via text messages. The IRS is aware of email phishing scams that include links to bogus web sites intended to mirror the official IRS web site. These emails contain the direction “you are to update your IRS e-file immediately.” These emails are not from the IRS.

The sites may ask for information used to file false tax returns or they may carry malware, which can infect computers and allow criminals to access your files or track your keystrokes to gain information.

Unsolicited email claiming to be from the IRS, or from a related component such as EFTPS, should be reported to the IRS at phishing@irs.gov.

For more information, visit the IRS's Report Phishing web page.

Fraudsters Posing as Taxpayer Advocacy Panel

Some taxpayers receive emails that appear to be from the Taxpayer Advocacy Panel (TAP) about a tax refund. These emails are a phishing scam, trying to trick victims into providing personal and financial information. Do not respond or click any link. If you receive this scam, forward it to phishing@irs.gov and note that it seems to be a scam phishing for your information.

TAP is a volunteer board that advises the IRS on systemic issues affecting taxpayers. It never requests, and does not have access to, any taxpayer’s personal and financial information.

This information is provided by the Internal Revenue Service (IRS) - for more resources visit their site at https://www.irs.gov/

Consumer Alert - Tax Scams