Tax (IRS) Scams

Tax scams are designed to illegally obtain your money. Learn how to recognize, report and recover from these types of scams.

Step 1:Recognize

Red Flags of a Tax Scam

If you contacted by someone claiming to be from the IRS, there are some red flags to look for that may indicate that it’s a scam, such as:

  • They ask for payment using a prepaid debit card, gift card or wire transfer.
  • They demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • They threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
  • They call you unexpectedly. When the IRS contacts taxpayers, they generally do so by mail first.
  • They may spoof or fake the IRS toll-free number on your caller ID.

Step 2:Immediate Actions

If you think you are the victim of a tax scam, it is important to take action right away to protect yourself and your finances. Here are some steps to take if you think you have been scammed:

  • Keep all documentation related to the scam, including any emails, messages or paperwork. You may need to provide this information to law enforcement when you file a report.
  • Report any unsolicited email claiming to be from the IRS to [email protected].
  • If someone submitted a tax return in your name, complete an IRS Business Identity Theft Affidavit (Form 14039-B).
  • If you provided financial information, like your credit card number or bank account information, contact your bank or credit card company right away. They may be able to help you cancel the transaction or get your money back.
  • If you paid them using gift cards or a wire transfer, contact the issuer. They may be able to help you stop the transaction.
  • If you provided personal information, like your Social Security number, you may be at risk for identity theft. Contact the three major credit reporting agencies — Experian, TransUnion and Equifax — and place a fraud alert on your credit reports. This will make it harder for the scammer to open new accounts in your name.

Step 3:Report

Reporting any type of cybercrime, including tax scams, is imperative to help others avoid being scammed. As a society, the more people that report online scams and fraud, the more national reporting data that is collected, and the better chance law enforcement has to catch the criminals and decrease cybercrime.

Step 4:Recover

Learn the Three Golden Rules to Spot a Scam

Scammers often utilize tactics to encourage you to act quickly and will use false information to persuade you to send money or personally identifiable information (PII). When faced with a questionable situation online, always follow the three golden rules to spot a scam:

Slow it down — Scammers will try to create a sense of urgency in order to get you to make a decision before you have time to think about it. Take your time and ask questions to avoid being rushed into a bad situation.

Spot check — Do your research to double check the details you’re being told. A quick internet search of the person or organization who contacted you followed by the words “scam” or “complaint” should help you determine if it’s a scam.

Stop! Don’t send — Scammers will try to steal your money by rushing you into paying with unconventional payment methods like gift cards, cryptocurrency or wire transfers. If they insist you pay using these methods, it’s likely a scam.

Take 5 Steps for Better Online Security

  1. Implement Multi Factor Authentication (MFA): Passwords are generally easy for scammers to crack, and even if you use strong passphrases, there’s still the possibility that a cybercriminal can obtain your passphrase in a data breach. Implementing MFA is a great way to maximize your security and ensure that you are the only one who can gain access to your accounts. MFA should be implemented on all accounts where it is available. Check your account’s security settings to see if it is something you can set up.
  2. Update Your Privacy Settings: Privacy settings allow you to control your personal information (name, address, phone number, date of birth, financial details, photos or videos, etc) and how that information is used. Review your privacy settings on all of your accounts including your social media accounts. Consider restricting who can see your friends list, contacts, photos and posts.
  3. Activate Automatic Updates: Automatic updates are a set of changes to an app, software or operating system that are automatically pushed by the developer to fix or improve it. Oftentimes, cybercriminals take advantage of security flaws to plant malicious software on your devices. By activating automatic updates, you will automatically patch security vulnerabilities to protect your data.
  4. Use a Password Manager or Create Strong Passphrases: A password manager is a software tool that securely stores all of your login credentials in one place, allowing you to create and manage strong, unique passwords for all of your accounts. If you are unable to afford a password manager, use strong passphrases. A passphrase is a combination of random words or a sentence that is much longer and more complex than a typical password. Using a passphrase instead of a password makes it much harder for hackers to guess or brute-force their way into your accounts.
  5. Learn the Elements of a Phishing Attempt: Familiarize yourself with the elements of a phishing email. Phishing emails tend to include a sense of urgency and multiple grammar and spelling errors. If they are asking you to reveal personal information, be suspicious. If you get a strange email, try contacting the company another way to confirm they sent that email. If the email is suspicious, mark it as spam.

TestimonialHear from Other Victims

Without, I don't know if I would have been able to react as quickly to protect my personal information.
Mary - Indianapolis, IN