This post originally represented data from the IRS’ 2018 “Dirty Dozen” list. It was updated on 3/26/2019 to reflect the 2019 list and statistics.
Every year, the Internal Revenue Service produces a “Dirty Dozen” list of the 12 most common tax scams from the prior year. This list serves to inform taxpayers of the complex and evolving schemes and to remind the public to stay vigilant in protecting their personal information.
The 2019 “Dirty Dozen” list highlights a wide variety of schemes that taxpayers may encounter throughout the year. Below, we explain four of the most common cons of 2019:
- Telephone Scams
- Phishing Emails
- Preparer Fraud
- Identity Theft
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As of February 2017, more than 10,000 victims have lost more than $54 million to telephone scams – an average of $5,400 per individual.
Telephone scams are when scammers call claiming to be IRS agents and demanding that you share key personal information to receive a supposed benefit or avoid alleged legal action.
Here’s how a phone scam normally goes:
You receive a phone call or a voicemail from someone claiming to be a representative of the Internal Revenue Service. He or she may either tell you that you are eligible for a supposed benefit, such as an unexpected tax refund, or that you have done something wrong and will be penalized in some way, such as having the police come to your house. Either way, the scammer will demand that you provide personal information in order to receive the benefit or avoid the penalty.
He or she will be likely to request funds directly from your bank account, and may also ask for other confidential information such as your bank account or Social Security number.
With today’s advancements in technology, scammers are able to alter their caller ID to replicate an actual call from the IRS. They may also give you a seemingly legitimate job title, email address and/or employment ID number, making these fake calls more and more difficult to differentiate.
How can you know for sure whether a call from the IRS is fraudulent or legitimate?
According to the IRS website, the IRS will never:
- Ask you for credit or debit card information over the phone
- Demand immediate payment via phone call, or call about taxes owed without having first mailed you a bill
- Demand that you pay taxes without first giving you the opportunity to question or appeal the amount they claim that you owe
- Require you to use a specific payment method to pay your taxes, such as a prepaid Visa card
- Threaten to involve the police or other law enforcement if you do not make a payment
If you receive a call from someone claiming to represent the IRS and asking you for money or other personal information, call the IRS immediately at 1-800-829-1040. They can clarify whether or not there is an actual issue with your taxes. Once you are certain the call was a scam, you can file a report with the Treasury Inspector General for Tax Administration (TIGTA) by calling 1-800-366-4484 or visiting www.tigta.gov.
Phishing is when a scammer sends you a bogus email with the specific intention of stealing your personal data. The email may try to lure you into clicking on a hyperlink to a convincing, but fake, IRS website where you’ll be asked to share your information in order to confirm your identity or claim a refund. Alternatively, the email may include attachments that are embedded with malicious codes, which can either damage or breach your device. Phishing emails can look uncannily similar to emails from legitimate organizations. They may even include bits of actual data about you, such as your address or date of birth.
As with telephone scams, the IRS will never send you an email to request personal information. The IRS only uses U.S. postal mail, and often certified mail, to reach out to taxpayers.
An email is likely a scam if it:
- Asks you to click on a hyperlink or open a suspicious attachment to claim a tax refund, fix an issue with compromised personal data or pay a tax obligation
- Uses a generic greeting (“Dear valued member;” “Dear account holder;” etc.) and doesn’t address you by your name, or doesn’t address you at all
- Is from an email or website address that seems strange (“@mail.irs.net” as opposed to “@irs.gov”)
- Is written to incite panic (think words and phrases like “URGENT,” “ACTION NEEDED IMMEDIATELY,” etc.)
If you suspect an email is fraudulent, you should NEVER click on any hyperlinks, open any attachments, respond to the email or call any listed phone numbers. If you would like to report a suspicious email, you can forward it directly to email@example.com.
This type of tax scam involves contact from an alleged tax preparer, either looking for personal information or asking you to help “update their records.” Following through on this request and providing any sort of personal data (Social Security number, bank accounts, credit card PIN numbers, etc.) can lead directly to identity theft.
Do not provide any confidential information to any individual or organization that you do not recognize. If you are unsure if the communication is from your actual tax preparer, reach out to them and verify.
Identity theft is when a scammer obtains or steals your personal information and uses it to withdraw funds, make a purchase or file a tax return while pretending to be you.
Most people have heard of identity thieves withdrawing money from bank accounts, or spending large amounts of money on frivolous things in other states or countries. Not many people are aware that identity thieves can also use your information to file a phony tax return on your behalf. Then, when you go to file your actual taxes, the IRS notifies you that your refund is already on its way to another address.
In 2017, the IRS halted approximately 1 million tax returns filed as a result of identity theft, amounting to approximately $8 billion in taxpayer dollars. Still, 242,000 taxpayers reported being a victim of tax identity theft that year.
How can you prevent identity theft?
- Do not share your personal information just because someone asks for it
- Be aware of suspicious emails, phone calls or mail regarding bills for items you didn’t purchase, debt collection for accounts you didn’t open or denials for loans that you never applied for
- Be vigilant in using security measures for things like your mobile device, your Internet connection, storing your personal information at home or online, etc.