The fact is that there are scammers galore out there. They can seem innocent at first, but they’re playing on your emotions from the start. Before long, they’ll try to sucker you into giving up your personal information and money. Show
They might pose as
long-lost relatives or call about pretend problems with your internet connection or computer or phone operating system. Some of the most common scams involve people pretending to be from the Internal Revenue Service (IRS) threatening arrest if you don’t comply with their requests. Here’s how they work—and how not to become their next
victim. Key Takeaways
How IRS Tax Scams WorkAuthorities say thousands of people—from everyday citizens to sophisticated professionals—fall prey to IRS and other imposter scams each year, losing millions of dollars in the process. According to a Federal Trade Commission (FTC) report, 17.16% Americans reporting imposter fraud lost money to scammers, with median individual losses of around $1,000. In total, imposter scams cost Americans some $2.3 billion in 2021—and those were just the cases reported to authorities. Many victims never file reports, often out of embarrassment. Imposter scams aren’t the only way criminals can steal your personal information, of course. Your information is stored in many places: on printed documents, on your computer, on your smartphone, in the cloud, with your employer, with your doctor, with your financial service providers, with your tax preparer, and with the IRS. Within this data—especially your tax returns—is valuable personal information such as your Social Security number (SSN), address, phone number, profession, marital status, and how much money you make, all information that can be used to impersonate or intimidate you. While you can’t prevent all types of tax-related fraud, you can take steps to reduce your risk. The IRS’s ‘Dirty Dozen’ Tax ScamsThe IRS publishes an annual list of what it calls the “dirty dozen”—some of the most common tax scams currently circulating. In 2021, new scams emerged to take advantage of coronavirus tax relief and continued into 2022. The IRS cautions taxpayers to be especially vigilant about the following 12 scams.
Let’s look at how IRS scammers contact people in more detail. Phone ScamsScammers carry out the majority of their schemes by phone and are often aggressive. They try to convince potential victims that they are legitimate IRS employees by spoofing caller ID information, using fake or even real IRS employee badge numbers, and having key information about their targets. Scam callers may try to persuade their targets to send them immediate payment through a preloaded debit card or gift card or via a wire transfer—which can be hard to trace. Even if you discover you’ve been scammed, recovering your money is virtually impossible. In February 2022, the FTC reported over a third of all fraud reported was via phone and while only 9% reported a financial loss, that loss accounted for almost $700 million with a median loss of $1,200. The IRS reminds taxpayers that it usually makes its first contact by mail, not by phone. Email ScamsEmail scams are another major threat. You might receive an email that appears legitimate because the scammer has appropriated the IRS logo or an actual tax software company’s logo. The email may claim to be about your refund, return status, or tax account. Links in the email may direct you to websites that look legitimate but are actually operated by scammers who want to steal your information and claim fraudulent tax refunds in your name. These sites may also contain malware that gives criminals access to your files or tracks your keystrokes without your knowledge to steal your website logins and passwords. The IRS cautions taxpayers that it does not initiate contact by email to request personal or financial information. Signs That You May Be a VictimAside from realizing after the fact that you gave your credit card number or other information to someone posing as an IRS agent, the following signs—explained by the IRS Taxpayer Guide to Identity Theft—could indicate that you’ve been the victim of tax-related identity theft.
Anyone can now apply for an identity protection PIN (IP PIN) from the IRS. An IP PIN could help protect you against scammers filing returns using your information. What to Do if a Possible Scammer Contacts YouIf you receive any communication that claims to be from the IRS, here’s what you should do. Emails Any email that says it is from the IRS is fraudulent. Do not respond to the email, click on any links in it, or download any attachments to it. Forward the message to , then
delete the original email. Text Messages The IRS does not send text messages. If you receive a text message that claims to be from the IRS, it’s a scam. Do not reply, open any attachments, or click on any links in the message. Instead, forward the text to the IRS at (202) 552-1226. If possible, send the IRS a second message with the number from which the fraudulent text originated,
then delete the fake IRS text message. Phone CallsDo not assume that a phone caller claiming to be from the IRS is legitimate, even if your caller ID shows a Washington, D.C., area code or says “Internal Revenue Service.” These details can be spoofed. Don’t give the caller any information. Say you cannot talk at the moment and will call back shortly. Do not ask for a phone number; instead, ask for the caller’s name and badge number. Hang up, then immediately report the call to the Treasury Inspector General for Tax Administration. Also email using the subject line “IRS Phone Scam.” The IRS will never call you to threaten arrest, nor will it send the local police to arrest
you. There are cases where federal officers arrest people for tax fraud, but these arrests don’t occur out of the blue. Ordinary citizens who have simply made a mistake on their tax returns are not at risk of going to jail over unpaid taxes. LettersEven though the IRS does communicate by letter, a letter that seems to be from the IRS may not be legitimate. Scammers can send fake IRS notices by mail, and they can be challenging to authenticate. Be suspicious if the letter asks for money. A letter asking you to make out a check to the IRS is a scam; a real payment to the IRS must be made out to “United States Treasury.” Scammers will instruct you to send payment immediately and dispute it later, even if you disagree with the amount of the notice. The real IRS allows taxpayers to dispute claims first and pay after an agreement is reached. Rather than immediately assuming that an IRS letter requesting payment or personal information is real or fake, go to IRS.gov and search for the relevant notice or form number. Also, read the IRS page titled “Understanding Your IRS Notice or Letter.” You can even call the IRS directly to inquire about a letter’s
legitimacy. Find the correct phone number in the help section of IRS.gov. How Does the IRS Communicate With Taxpayers?The IRS will generally reach out initially by letter. It does not make phone calls out of the blue, and it does not use email or text messages to communicate with taxpayers. What if I’m Threatened if I Don’t Immediately Pay?The IRS never asks for payment up front. All taxpayers are allowed to dispute its judgments before paying, with financial settlement only occurring after an agreement is reached between the IRS and the taxpayer. If you are asked for immediate payment or else, it’s a scam. What Is Phishing?Phishing is an attempt to get personal and financial information from someone by email or text or through websites or on social media. Emails, texts, and social media posts can have links that take you to phony websites that look legitimate but aren’t, from which scammers can access your info and put malicious software on your computer or phone. Never click on unsolicited links in any form of digital communication. Also, never download an attachment whose source is unknown to you. Once you do either, it’s generally too late. The Bottom LineAnyone can become a victim of an IRS-related scam, because there are so many ways for criminals to steal your personal information without your knowledge—ranging from hacking and phishing to social engineering. Your odds of becoming a victim will go down if you’re aware of the scams and how they work. Never provide information in response to an unsolicited phone call or email, for example. New scams emerge all the time, so listen to your gut if anything seems suspicious. Don’t engage with anyone who reaches out to you about your taxes and always contact the IRS directly by using the information at the official IRS website, IRS.gov, if you’re concerned. The IRS and other agencies rely on you to bring these scams to their attention. If
you make a report today, you may be helping someone else down the road. Is IRS sending out 2022 letters?IR-2022-178, October 13, 2022 — Starting this week, the Internal Revenue Service is sending letters to more than 9 million individuals and families who appear to qualify for a variety of key tax benefits but did not claim them by filing a 2021 federal income tax return.
Is the IRS really sending out letters?The IRS and authorized private debt collection agencies do send letters by mail. Most of the time, all the taxpayer needs to do is read the letter carefully and take the appropriate action or submit a payment.
What IRS letters are sent by certified mail?Return Questions
If the questions aren't time-sensitive or critical to processing a return, the IRS will send the request for information through standard mail. However, more critical requests will be sent as certified letters. The IRS will typically include any forms that need to be filled out, as well.
Why would the IRS send 2022 letters?The IRS sends notices and letters for the following reasons: You have a balance due. You are due a larger or smaller refund. We have a question about your tax return.
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