Tax Scams: What to Expect in 2019

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It used to be that this time of year was the season for tax scams — during the run-up to Tax Day itself.

But no longer. Tax scams are a year-round event with crooks, in the main, either posing as the IRS trying to trick you into sending them money or faking a taxpayer’s identity to claim a refund. For example, one of the newest and most widespread tricks, known as the tax transcript scam, involves a fairly convincing phishing attempt that isn’t tied to the filing season.

Victims receive an email pretending to be from “IRS Online” with an attachment labeled “Tax Account Transcript.” Genuine transcripts are summaries of individuals’ tax records and histories. But this attachment carries a dangerous payload — a piece of malware that tries to steal information from your PC. The Internal Revenue Service (IRS) says not only does the agency not send unsolicited emails like this to the public, it also would never email a sensitive document such as a transcript to anyone. So, if you receive one of these messages, you know what to do: don’t click on the attachment, just delete the email.

Last year, the IRS reported a more than 60% rise in tax email phishing schemes. That doesn’t include the number of impostors — bogus callers — claiming to be with the agency, demanding payment of non-existent tax debts. According to a recent online report from Forbes magazine, tax impostor scams have netted more than $63 million for the crooks during the past five years.

The IRS repeatedly stresses that it never calls people to demand immediate payment. Nor does it threaten to involve law enforcement or arrest you for non-payment or ask you to pay bills via gift cards.

How the IRS Contacts You : “The IRS initiates most contacts with taxpayers through regular mail delivered by the U.S. Postal Service,” the agency explains. “However, there are special circumstances in which the IRS will call or come to a home or business, such as:
* When a taxpayer has an overdue tax bill
* To secure a delinquent tax return or a delinquent employment tax payment, or
* To tour a business, for example, as part of an audit or during criminal investigations.

“Even then, taxpayers will generally first receive a letter or sometimes more than one letter, often called notices, from the IRS in the mail.”

If you do receive a suspicious message purporting to be from the IRS claiming you owe money, don’t get involved in a phone conversation or chain of emails. Instead, call the agency at 1-800-829-1040 to check it out.

Despite the year-round nature of some of these tricks, there’s no doubt that the coming weeks remain the hottest for tax scams, ranging from fraudulent refund claims to shady and fake tax preparers.

The agency’s own list of the most common scams — updated in 2018 — which it calls the “dirty dozen,” names them as: phishing, phone scams, identity theft, return preparer fraud, fake charities, inflated refund claims, excessive claims for business credits, falsely padding deduction on returns, falsifying income to claim credits, frivolous tax arguments, abusive tax shelters and offshore tax avoidance.

Five Key Actions : Note that a number of these actually relate to fraud committed by taxpayers themselves. The rest cover just about every type of scam around today. To protect yourself against these types of crimes, here are 5 key actions you should take.

1. Safeguard your personal information, notably your Social Security number. Ensure you have up to date security software on your PC to avoid data theft,

2. File your tax return as soon as possible. If it’s rejected, it’s possibly because someone already fraudulently claimed your refund. You’ll need to complete an Identity Theft Affidavit to put this right. Download it here:

3. If you plan to use a tax preparer, seek recommendations from trusted acquaintances. Always check out the preparer’s credentials. Here are 10 tips from the IRS on how to choose:

4. Don’t be persuaded by individuals or groups claiming that, for some obscure reason, you don’t have to pay tax at all. This is what the IRS refers to as “frivolous tax arguments.” Learn more here:

5. Don’t be tempted to make untrue statements or claims on your own return. If you do, you potentially risk going to jail.

One final point: If you need to visit the IRS online, go straight to Any other address that turns up in a Google, Bing, Yahoo or other search could be a fake, even if it looks like it belongs to the IRS.

Paying taxes is a painful fact of life. Don’t make it hurt even more by falling for a tax scam — remain skeptical and vigilant!