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Tax Tip Tuesday: The 5 Tax Refund Scams to Beware of This Tax Season

red, black and white Danger, Tax Scam warning sign

Tax refund scams are the most prevalent way criminals trick individuals to illicitly obtain sensitive information, file fraudulent tax returns, perpetrate financial theft, and compromise personal identities. These scams are particularly lucrative for fraudsters, given that many individuals lack experience dealing with the IRS. Once these scammers acquire your information, it can pave the way for additional fraudulent activities and open the door to potential tax-related identity theft. Unfortunately, the frequency of these scams is on the rise. Exercise caution this tax season and stay alert when it comes to these five tax refund scams.


Phishing Emails Asking to Verify Information

Phishing is a deceitful email scam designed to extract personal information. Scammers send emails posing as the IRS, often using intimidating, threatening, or urgent subject lines to demand immediate payment. Clicking on these links directs you to a page resembling the IRS website, but it is a fraudulent hoax. Any information provided, such as a Social Security number or credit card details, is sent directly to the scammer. Additionally, you may unknowingly download malware onto your device, giving scammers access to more information or compromising your email security.


Prevention Tips:

  1. Check the "From" name before clicking on email links. Scammers often change names to mimic the IRS or official agencies. 

  2. Hover over or click on the name to reveal the actual email address. If it does not have a .gov address, it is a scam.

  3. Enhance security by using a VPN with Antivirus to protect your devices and home network from viruses and malware. 


Phone Calls Demanding Money

Scammers use bots and robocalls to inundate recipients with numerous calls, posing as representatives from the IRS. When you answer, they claim you owe taxes, demand immediate payment, and may even issue threats of arrest if you do not comply. There is also a risk that they will attempt to fraudulently obtain your Child Tax Credit by tricking you into sharing sensitive information. Any money or information provided in response to these calls goes directly to the scammer, not the IRS.


Prevention Tips:

  1. Phone scams may mimic the official IRS phone number, so do not solely rely on caller ID. The caller might provide a fake badge number or possess knowledge of your Social Security Number obtained through theft.

  2. If you receive a call claiming to be the IRS, ask the caller for a reference number. Disconnect the call and independently verify by dialing one of the official IRS phone numbers. This precaution ensures you are contacting the authentic IRS and not falling prey to a scam.


Claiming Your Social Security Number is Suspended

Scammers resort to aggressive threats to coerce you into providing them with the desired information. A fraudster may falsely claim that your Social Security Number is in the process of being revoked or suspended due to an alleged tax-related issue.


Prevention Tips:

  1. Disengage immediately! Hang up, delete the email, and disregard the scam. Your Social Security number cannot be suspended, canceled, frozen, or revoked

  2. Safeguard your sensitive information, particularly your Social Security number, even if it is just the last four digits. Avoid giving it out whenever possible, and never share it with someone who calls you. 

  3. Consider utilizing an SSN Monitoring service to receive alerts if someone uses your Social Security number without consent. This additional layer of protection enhances your ability to detect and respond to potential misuse of your personal information.


Email Requesting Additional Tax Forms

If you receive an email from the IRS requesting you send a tax form, beware and exercise caution. Legitimate forms taxpayers may need to complete, such as W-9 for freelancers and W-4 forms for employees, are typically directed to companies and not directly to the IRS.


Prevention Tips:

  1. Disregard the message and promptly report the incident to the IRS. The IRS does not communicate with individuals through email. Any solicitation for forms of this nature is indicative of fraudulent activity.


You are Notified the IRS Owes You an Extra Refund

You may receive a message, often an email, alleging the IRS has recalculated your tax return, resulting in an additional refund. However, you must click a link to confirm personal or financial information to access this extra money. This scenario exemplifies a classic phishing attempt, where the promised refund is nonexistent, and the provided information is sent directly to identity thieves.


Prevention Tips:

  1. Exercise caution and skepticism regarding emails claiming to be from the IRS. Legitimate correspondence from the IRS is initiated through formal letters.

  2. If you want to check the status of your tax return, utilize the IRS' official "Where's My Refund?" tool for accurate and secure information. Avoid clicking on links in unsolicited emails to safeguard your personal and financial data. 


Protect Yourself Against Tax Refund Scams

Tax season is full of scams. But, by paying close attention, you can spot tax refund scams and safeguard your sensitive data. For added protection and to prevent identity theft, file your taxes early. The sooner you file, the less time you give fraudsters to impersonate you.

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