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IRS Tax Return Scams: How to Stay Safe and Protected

Whenever tax season rolls around, legions of IRS tax return scammers come out of the shadows. They’re on your phone, they’re on the internet, and they know just how to trick you into giving away personal information. No one wants to be in trouble with the IRS, and that’s exactly why some of these scams are successful.

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Tax return scams may be surprisingly common, but you don’t have to be a victim. With a little knowledge and awareness you can stay safe from IRS tax scams. Keep your data secure and your identity hidden, and make sure your tax refund goes to your own bank account!

Common Types of IRS Tax Scams

IRS tax return scams come in an increasingly wide variety. Some are old fashioned phone scams, others use sophisticated digital trickery to take your information. There are even tax preparer scams that falsify your returns and collect money on your behalf! Below are a few of the most common types of IRS tax return scams you should keep an eye out for.

Phishing Scams

Phishing scams are more common than you might think. These simple attacks come in a number of different forms, including fake websites and spam e-mails. The goal is to trick you into giving up information voluntarily by claiming your accounts are under audit. All you have to do is enter a few personal details into a website and the IRS will take care of the rest. The worst phishing scams even trick you into downloading malware designed to steal passwords or take personal information from your browser history.

Phone Scams

IRS phone scams have gained popularity in recent years, possibly due to the public’s increased awareness about virtual scams. In these attacks, unsuspecting people will receive a call from someone claiming to represent the Internal Revenue Service. The details vary, but most of the time the caller claims you owe a large sum of money in back taxes, and if you don’t pay immediately the police will be sent to your house. Provide your payment details right away and you can get squared away on the phone.

Phone scams often look incredibly realistic. Caller ID numbers suggest an official IRS pay center. Agents give out their name and badge number. If you refuse to pay, the scammers even call back from a new number claiming to be the police, threatening to put you in jail if you don’t pay!

Scam E-mails

Phishing scams often take the form of e-mails. Instead of tricking you into downloading fake files or entering info into a bogus IRS website, these scams insist you owe money and should fill out attached forms with your personal information and send it back.

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Identity Theft

These scams are sneakier than most IRS tax return scams. Instead of contacting you or trying to get your personal information, identity scammers already have some basic information on hand. They file fake returns in your name, then collect refunds you may or may not have been entitled to. Only when you file your real returns does the fraud become apparent.

Tax Return Preparer Fraud

Over 60% of individual tax payers rely on professional accountants to help them with their returns. Most of these preparers are legitimate, of course, but there are a few bad actors out there who will falsify your returns, inflate deductions or refund claims, and pocket the extra cash. Even if you use a well-known tax preparing service, there are some workers who will perform this exact scam.

Refund Scams

A number of tax payers have reported receiving an official looking letter via snail mail saying they’re owed a large sum of money by way of a tax refund. To claim their cash, all they have to do is visit the website printed on the letter, enter their bank account details, then wait for the deposit.

Charity Scams

Fake charities are groups of scammers that masquerade as charitable organizations. They work via e-mail and phone to attract donations from unsuspecting contributors, promising discounts on their taxes in return for a little cash up front. Victims make the donation, then when tax time rolls around, they attempt to write it off as a deduction. A lot of these fake charities have names that look or sound similar to well-known charities, making them tough to spot.

How to Avoid IRS Tax Return Scams

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Staying safe from common tax scams is a matter of general security and remaining watchful on a daily basis. It’s a lot like avoiding bank account hackers or similar scams, but since it involves the IRS, the stakes can be a lot higher.

Recognize Official IRS Communications

The IRS never calls or e-mails. Let’s repeat that in bold: the IRS will never call or e-mail you. If there was an error on your taxes or if you owe money, the IRS will contact you with a physical letter via the postal service, no exceptions. This official notice often asks you to contact them to sort things out, at which point it’s safe to talk to an agent over the phone. The IRS won’t initiate contact via social media, text message, or any means other than a letter, so if you see an e-mail or get a call claiming otherwise, you know it’s a scam.

Check IRS URLs

The IRS was a little slow in adopting web-based forms and filing methods. The agency does have an official domain, however, and because it’s part of the U.S. government, it utilizes the official .gov suffix. Whenever you’re looking for forms or entering information, always check and make sure you’re using irs.gov and nothing else.

Ask for Verification

Best used with potential phone scams, the simple act of asking for a day or two to verify the debt you owe is all that’s needed to separate a scammer from the real thing. The IRS will always give you the opportunity to question or appeal the amount they claim you owe. There is no such thing as “pay now or else”, nor will the IRS send the police to your house or threaten you with an arrest.

Traceable Payment Methods

One way scammers get around blocked payments is to ask for money to be delivered in a non-refundable manner. Credit card transactions can be traced, PayPal payments can be blocked, even bank account funds can be halted or redirected, putting scammers at risk of being caught and giving victims a chance to recover their funds. Instead, some scams will request money be sent in other forms, like wire transfers or even gift cards. It sounds ridiculous, but hundreds of people think the IRS will accept payment in the form of iTunes gift cards mailed out of country.

The IRS will never ask for your credit card over the phone. They also do not force you to use a particular payment method, especially nothing as crude as gift cards. When dealing with a potential impostor, always ask if you can send the payment through some other method. If they refuse, you know you should hang up right away.

When in Doubt, Assume it’s a Scam

If something looks and sounds a little fishy, it’s probably a scam. If you’re ever in doubt about a letter, phone call, or e-mail, ignore it. You can always contact the IRS yourself to ensure there are no outstanding tax issues that need to be taken care of.

Keep Your Identity Secure

Having your identity stolen is a sure-fire way to fall victim to a tax return scam. Staying vigilant with personal information can prevent a number of sneaky tax frauds, it’s all just a matter of practicing common efforts to keep your data secure. Below are a few tips to do just that.

  • Always use HTTPS when shopping online.
  • Don’t post sensitive information on social media accounts.
  • Encrypt your communications and your devices.
  • If your phone or laptop is stolen, immediately change your account passwords.
  • Secure your devices with strong lock screens and login passwords.
  • Shred sensitive documents before recycling.
  • Use strong passwords and PINs on all digital sources.
  • Use two-factor authentication on all accounts.

Use a VPN

Virtual private networks are fast becoming an indespensable tool for basic online security. Whether you’re trying to keep your smartphone secure while traveling or just looking for a way to lock down your data while surfing at home, VPNs make it incredibly easy to stay safe, all thanks to background traffic encryption and virtual IP addresses. With a good VPN on the job, you can thwart a lot of scammers and hackers without even trying.

What to Do if You Encounter a Tax Scam

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Think you’ve fallen victim to a tax scam? Did someone get in touch with you claiming to be the IRS, but you’re suspicious? There are a few things you can do to report these bad actors.

Phone Scams

If you get a call from someone claiming to be the IRS, don’t give them any information, especially if you know you don’t owe taxes. Contact the Treasury Inspector General for Tax Administration and be prepared to give them as much information about the call as you can. Also contact the IRS via phone to make sure it wasn’t a valid call and you really do owe taxes.

Phishing Scams

Did you get a fake e-mail claiming to be from the IRS? You can report it directly to the IRS by forwarding the e-mail to phishing@irs.gov.

Identity Theft

If you think you’re a victim of identity theft, or if you believe someone filed taxes using your social security number, contact the IRS Identity Protection Specialized Unit right away.

Tax Preparer Fraud

Before choosing a professional tax preparer, it’s a good idea to make sure they’re legitimate. The IRS keeps a directory of federal tax return preparers along with their credentials and qualifications. Search for the preparer in question to make sure they’re licensed.

Protect Yourself with a Reliable VPN

Staying safe online requires a lot of attention. VPNs help make things simpler by providing always-on encryption, virtual IP addresses, and a host of other privacy and security features. VPNs keep you safe by encrypting traffic before it leaves your computer, making it impossible to tell who you are or what websites you’re visiting. Without a VPN your data is unsecured and easy to obtain, making it easy for hackers to get hold of.

Below are our recommendations for safe, trustworthy VPN services. Each one is fast, friendly, and easy to use, offering the best in encryption and download speeds no matter where you live.

1. ExpressVPN

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ExpressVPN is one of the fastest and easiest to use VPNs on the market, and it doesn’t skimp on security features, either. 256-bit AES encryption on all data ensures you stay invisible, a zero-logging policy on traffic, DNS requests, and IP addresses protects information after it leaves your devices, and both DNS leak protection and automatic kill switch features make sure your identity is never revealed. ExpressVPN keeps you safe on a wide range of devices, too, including desktop PCs, tablets, and smartphones.

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2. CyberGhost

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CyberGhost offers an amazing array of online privacy features designed to keep you safe no matter what. It starts with solid 256-bit AES encryption, the industry standard for unbreakable data cryptography. A zero-logging policy ensures traffic, time stamps, and IP address are never stored long-term, and both DNS leak protection and an automatic kill switch lock down your identity to keep it secure. CyberGhost even works on mobile and desktop devices for added safety both at home and while traveling.

3. NordVPN – Powerful Protection

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NordVPN operates one of the largest server networks in the business. The list is constantly growing, but at the time of writing it sits at just over 3,300 servers in 59 different countries! With variety like that, you’ll never have a tough time connecting to a fast server home or abroad. NordVPN pairs a healthy selection of privacy features along with its network, too, including a double encryption, DDoS protection, 256-bit AES encryption, DNS leak protection, an automatic kill switch, and an incredibly thorough zero-logging policy.

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Conclusion

IRS tax return scams can be difficult to spot, as they often employ subtle methods you only catch after the fact. By protecting your online identity and keeping an eye out for suspicious calls and e-mails, though, you can keep yourself safe from potential scams. Remember: the IRS will always contact you via postal service first, no exceptions. You always have options at your disposal.

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