Every year, thousands of unsuspecting people are the victims of IRS scams. It’s estimated that around 165,000,000 tax returns were filed in 2022, and a similar figure is expected in 2023. With so many people filing tax returns in the US, scammers are becoming more and more dangerous. They’re preying on the weak and taking advantage of your common worries. Nobody wants to end up on the bad side of the IRS, which is why impersonation scams are so easy to get away with.
Today, we’ll look at what IRS scams are and how you can protect yourself from them. By taking a few simple steps, you can avoid being a victim - and keep your money safe.
What are IRS impersonation scams?
The gist of an IRS scam is that someone will contact you posing as a government official. Typically, there are two different types of scams floating around right now:
- An identity theft refund scam
- An identity theft payment scam
The identity theft refund scam is when someone contacts you stating that you’re due a tax refund. They may have information - such as your Social Security number or Tax ID number. This is all done to make them seem like official IRS agents. Then, they hook you in by saying you’re due a tax refund. All they need are your bank details, so they can refund you the money.
The identity theft payment scam is similar, but the scammer contacts you stating that you owe money to the IRS. This preys on your fear of ending up with tax penalties, making it likely you instantly respond and provide payment details to send the money.
In both of these cases, you’re giving up personal information that can be used against you. The scammer now has access to your bank, where they can take money or use your details to commit other identity theft scams.
How do you prevent IRS scams?
It can seem incredibly difficult to spot IRS scams - especially when you’ve recently filed a tax return. Sometimes, you’re expecting the IRS to contact you, which makes it even easier to fall victim to impersonation scams.
Thankfully, there are some actionable steps you can take to avoid being scammed. Here’s what you should do:
Be aware that the IRS never calls you to demand payments over the phone
The IRS clearly states that it will never call taxpayers to make payment demands over the phone. Instead, if you are owed money - or owe money - they will send mail to your house. The IRS will never ever call you and ask you to send money over the phone. In fact, they will never call you about taxes out of the blue. Sometimes, they may get a private debt collector to call about payments, but only after they’ve sent two letters in the mail.
If you haven’t received any letters about tax refunds or owed payments, don’t trust the caller on the line.
Hang up and search the number online
If you are called by a number that claims to be from the IRS, hang up if they start talking about tax payments or refunds. Then, search for the number online - there are many websites that list scam numbers with information from other people. You will easily be able to see if this number is a scammer or not based on the results.
Plus, it is always safer to just hang up and contact the IRS yourself if you’re unsure. This is the easiest way to know if you’re actually being contacted by a legitimate government agency or not.
Pay close attention to emails and never click links
Often, IRS impersonation scams happen via emails. You’ll receive what looks like an official email from an IRS email account. It all looks very legitimate on the surface, often telling you that you’re owed a refund or have to make a payment. You’re told to click on the link to follow through, which is usually a phishing scam.
Never click on any links you receive in emails from the IRS. Furthermore, always click on the sender’s information to see who actually sent the email. Sometimes, it says IRS at the top, but after clicking for more info you recognize a dodgy email address.
The IRS also states that they never use email to discuss tax debts or refunds with taxpayers. As such, it should be a massive red flag if you ever receive an email like this.
File your tax returns early and accurately
One other way to protect yourself from IRS impersonation scans is by dealing with your taxes as early as possible. Don’t wait until the last minute as you may rush your return. Consequently, there’s a higher likelihood that you’ll be drawn in by a scam if you’re contacted by the “IRS.”
Instead, complete your year-end tax return as soon as you can. This will ensure you receive confirmation from the IRS many months before the tax scammers kick into action. If you get calls or emails stating you owe money, you’ll know they’re scams as you already paid your taxes and received confirmation that your payments are up-to-date months ago.
In conclusion, IRS scams are extremely common in this day and age. Typically, scammers will use phone calls or emails to try and extract personal information and money. The best way to protect yourself is by being aware of how the IRS contacts taxpayers. They will never phone or email you about tax refunds or payments - at least not before sending out letters in the mail. Never click on any links in an email, and check the sender’s email address. When it comes to phone calls, the safest option is to hang up if someone says they’re from the IRS. Look up the number online to see if other people reported it as a scammer, and contact the IRS yourself to double-check if they tried to contact you.