Each week, the NTIC Cyber Center highlights a different social engineering scam impacting individuals and communities within the National Capital Region. We encourage everyone to share this information with friends, colleagues, and loved ones to help reduce their risk of becoming a victim of financial fraud and identity theft.
Whether tax season elicits delight or dread, one thing is for sure: it’s prime time for scammers to perpetrate Internal Revenue Service (IRS) tax scams. These scams may come in a variety of forms, all designed to separate you from your money.
One tactic scammers use is to impersonate IRS or tax company employees over the telephone. Claiming to offer a tax refund, scammers request personal and banking details and pretend to remit payment. Unfortunately, no such refund awaits—the scammers are only interested in exploiting victims’ personal and financial information for their own benefit. Scammers may also call with bad news—that the call recipient owes money to the IRS. Employing a sense of authority and urgency, scammers often demand immediate payment in the form of wire transfers, prepaid debit cards, or gift cards. They threaten bogus consequences such as fines, arrest, deportation, suspension of a business or driver’s license, or law enforcement action if a victim doesn’t pay.
Scammers also make use of email to perpetrate tax scams. They target tax payers, human resources departments, and tax preparers alike with seemingly official IRS or tax-related emails and requests for payroll direct deposit forms, W-2s forms, and other sensitive, personal information. The emails may direct to a phishing page—a website designed to look like a legitimate service but is really a façade to pilfer any information typed into the page. These pages harvest usernames, passwords, social security numbers, financial details, and other tax data from those who have not properly scrutinized the phony website. Scam emails may also include attachments or web links that, when downloaded or accessed, install malware or spyware on victim’s computers that steals login credentials, banking and credit card information, or sensitive tax details. By accessing computers or sensitive information using these methods, scammers can wreak havoc by stealing victim’s identities, filing fraudulent tax returns, or siphoning money directly from bank accounts.
Whichever ways tax scammers conduct their ploys, beware that they may have done their homework in advance of their scheme. They are known to conduct preoperational reconnaissance on their victims, arming themselves with names, addresses, family members, or other details that lend an element of believability to their ploy. Scammers may also use caller-ID spoofing techniques to make their calls appear as if they originate from a legitimate IRS phone number.
To reduce your risk of becoming victimized by an IRS tax scam, familiarize yourself with the following prevention and mitigation strategies:
If you receive an unexpected call from someone claiming to be an IRS representative, don’t provide the caller with any personal or financial information. Instead, hang up and call the IRS directly at one of their official phone numbers to confirm the legitimacy of the call. A list of these numbers is available on the IRS website.
Never open links or attachments in emails from unsolicited or unknown senders.
Examine URL destinations before clicking on them by hovering a mouse pointer over the hyperlink; URLs may not always be what they seem. Don’t believe us? Try it here: https://www.ISwearThisLinkDoesNotGoToTheIRS.gov/
Remember that the IRS will never initiate contact by email, text message, or phone without first sending an official notice by mail. Additionally, the IRS will never request personal or financial information including bank account or credit card information over the phone, by email, or via social media.
Check account statements regularly for any indications of fraudulent or unauthorized activity.
File as early in the tax season as possible before a scammer files for you!
Forward any suspicious IRS-related emails to firstname.lastname@example.org.
If you are a tax preparer and believe you may have suffered a W-2 data loss to a tax scam, notify the IRS at email@example.com and provide contact information. For guidance on reporting a data loss to state tax entities, email the Federation of Tax administrators at StateAlert@taxadmin.org.
The IRS also provides guidance for businesses and payroll service providers impacted by tax scams on their website. We encourage tax scam victims to file a complaint with their local law enforcement and the FBI’s Internet Crime Complaint Center.
Tax season can be complicated. Although maintaining awareness of IRS tax scams may not help with your accounting headaches, it will minimize the chances of falling victim to these schemes.