IRS Issues Updated Warnings for Phishing and Other Tax Scams

The IRS has released several warnings recently about new tax scams designed to steal information and ultimately money from taxpayers.

These tax scams are commonly known as phishing.  Phishing is an attempt by individuals to obtain personal information about someone that they can then use to steal money from that individual.  Personal information valuable in a phishing scam includes but may not be limited to user IDs, passwords, credit card information, and bank account information.

There has been a recent increase in such tax scams in which individuals claim to be from the IRS and use various forms of intimidation in an effort to bully or scare people into providing their personal information to the caller.  This contact may come through phone calls, text messages, e-mails, and even social media.

Example of Tax Scams Shared by the IRS

In general, tax scams will ask the individual to provide personal information using either the carrot or stick method.  That is, some scams will purport to require the information to render payment to the IRS and bad things will happen to the individual if they do not provide the required information.  Alternatively, other scams are offering to give a tax refund or other monies to the victim, again requiring the individual to provide personal information so the funds can be sent to the correct account or location.

Following are a few specific examples of some of the tax scams highlighted by the IRS recently.

Claims of Money Owed to the IRS

Callers tell victims who may be recent immigrants that they owe money to the IRS and must make immediate payment by sending a wire transfer or pre-paid debit card.  The callers threaten that failure to render payment will result in the individual being fined, arrested, and deported.

Clearly, in this example the caller is playing on fear of immigrants who may be new to the United States.  Such individuals may not be familiar with the valid methods used by the IRS to contact taxpayers and may be more likely to fall victim to such intimidation tactics.

It may be possible that those receiving such calls actually do owe money to the IRS, which can may receiving such a call from a phisher all the more intimidating.

Directions to Visit Non-IRS Web Site

Individuals may receive an e-mail or other contact directing them to a web site other than www.irs.gov, which is the official IRS web site.  The fake web site will ask the individual to enter personal information, which the phisher can then use to steal money from the victim.

Notification of Rejected Payment

Individuals may receive a notification that a payment the individual attempted to make to the IRS was rejected.  The request asks the individual to provide their bank account information to confirm it is valid, but the request is actually an attempt to gain your valid bank account information so the phisher can withdraw money from your account.

Offer of Tax Credit

Victims receive an e-mail indicating they are due a tax credit that the IRS will send to them if they register their bank account information on a provided web site.  Again, if the victim enters their bank account information on the web site, they have provided their information to the phisher who can use it to withdraw money.

What Should You Do in Response to a Possible Scam?

If you receive a phone call, e-mail, or other contact from someone claiming to be from the IRS that you believe may be suspect, you can take several steps to protect yourself.

You should not initially provide any requested personal information to the individual or reply to an e-mail.  Rather, contact the IRS at 1-800-829-1040.  A representative with the IRS can help you determine if you do actually owe money to the IRS.  If the call you received was a scam, the IRS representative can provide further assistance on how to report the incident to help warn others about the tactic used against you.

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by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.