Tax season is here, which means your information and refund are at risk. As many begin filing their income tax statements ahead of the April deadline, scammers and criminals already have several cons in place to try to steal your personal information and your return.

Tax filing can be a complicated and stressful process. Scammers recognize this and prey on consumers’ vulnerability and fear of Internal Revenue Service (IRS) repercussions to trick them into divulging their personal information.

To keep your information and finances safe, it is important to understand the signs of tax fraud and ways to effectively avoid it. Let’s take a look at a few common tax scams you may encounter during tax season:

Refund Recalculation

Scammers send emails or text messages disguised as IRS communications explaining your refund was recalculated and is more than initially expected. This is good news, right? Not so fast. The email then prompts recipients to click a link to claim their tax refund, which takes them to a form asking for their Social Security number (SSN), driver’s license number, address, date of birth and more. This information is not used to release your higher refund, but rather steal your information, hack into your accounts and rack up loans in your name.

Ghost Preparer

A "ghost" tax return preparer is someone who prepares your return but does not sign it. This is often an indicator of someone who is exaggerating the size of the taxpayer’s return to charge extra fees. Anyone hired to prepare your return is required to have a valid Preparer Tax Identification Number (PTIN) and sign your return. Ghost preparers may also require payment in cash, claim fake deductions to inflate your return or deposit the refunds into their bank account, not yours. If your tax preparer does not want to sign the return, it is a red flag.1

Gift Card Requests

Scammers call, email, text message or contact you through social media impersonating an IRS agent and claim you owe federal taxes and are about to be charged with criminal activity. To remedy the situation, they insist you purchase various gift cards to cover the penalty fee, call them back and give them the card numbers – scamming you out of your hard-earned cash without a trace.

Tax Refund Status

Tax refunds can take a few weeks to become available after filing, depending on whether you choose to have them mailed to you or deposited directly into your account.2 Scammers know you are anxiously awaiting your return and may send you an email with a link to get the "status of your refund." The link leads to a website made to look like an IRS site, which exposes your device to dangerous malware. While the IRS will never contact you regarding the status of your return, they offer the ability to track it yourself on their website.

Taxpayer Advocate Service

As an updated spin on the IRS Taxpayer Advocate Service (TAS) phone scam, criminals can now "spoof" their phone numbers to appear as though they are calling from the TAS office in Houston or Brooklyn. The TAS is a legitimate branch of the IRS, which assists individuals with IRS-rated challenges. However, they do not call out of the blue. In the con, scammers call taxpayers and explain they are entitled to a large tax refund in exchange for their SSN, individual taxpayer identification number and other personal information.3

Tax Transcript

Fraudsters send an email to taxpayers with their "tax transcript," or summary of their tax return, attached. While the IRS does provide tax transcripts, they are not emailed without a prior request. Opening the attached document could unleash malware onto your device, jeopardizing your technology, information and financial standing. Instead, request your tax records safely directly from the IRS.

Fake Ploys

Scammers will often create fake agencies and taxes that the taxpayer is supposedly required to pay. For example, fraudsters claiming to be from the "Bureau of Tax Enforcement," which does not exist, have contacted individuals concerning an overdue payment and threatened to put a lien or levy on their assets until their "debt" is settled. Criminals have also been known to modify the W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) IRS tax form to get personal data from individuals. Taxpayers may also get requests to pay their "Federal Student Tax," which does not exist, to avoid their SSN being suspended.4

Phone, email, text message and social media tax scams can result in identity theft, lost tax refunds, jeopardized accounts, financial loss, damaged credit and more. To help you stay safe and avoid fraud through tax season, the IRS has offered the following tips:5

  1. Choose a tax preparer wisely. Look for a preparer who is available year-round.
  2. Ask your tax preparer for their IRS Preparer Tax Identification Number (PTIN). All paid preparers are required to have one.
  3. Don't use a ghost preparer. They won't sign a tax return they prepare for you.
  4. Don't fall victim to tax preparers' promises of large refunds. Taxpayers must pay their fair share of taxes.
  5. Don't sign a blank tax return. Taxpayers are ultimately responsible for what appears on tax returns filed with the IRS.
  6. Make sure you receive your refund. Your refund should be deposited into your bank account, not your tax preparer's.
  7. The IRS will not call you threatening legal action. If you receive a call like this, hang up.
  8. Don't respond to text messages, emails or social media posts claiming to be the IRS. They may contain malware that could compromise your personal information.
  9. Don't click links or open attachments in unsolicited emails or text messages about your tax return. These messages are fraudulent.
  10. Protect your personal and financial information. Never provide this information in response to unsolicited text messages, emails or social media posts claiming to be the IRS.

If you believe you have been the victim of tax-related fraud, file an IRS report immediately. You can also report instances of IRS-related phishing attempts to the Treasury Inspector General for Tax Administration on their website or by calling 800-366-4484.

Monitor our Security page for the latest information on emerging scams and how APGFCU works to keep you safe.

1https://www.irs.gov/newsroom/beware-of-ghost-preparers-who-dont-sign-tax-returns
2https://www.irs.gov/pub/irs-news/at-01-48.pdf
3https://www.irs.gov/newsroom/irs-warns-of-new-phone-scam-using-taxpayer-advocate-service-numbers
4https://www.nerdwallet.com/article/taxes/avoid-irs-scams#the-latest-irs-scams-1711016498
5https://www.irs.gov/compliance/criminal-investigation/irs-criminal-investigation-issues-10-tips-to-avoid-tax-season-fraud