Five Ways to Protect Yourself from Tax Scams

Nobody likes tax^* season, and not just because you must prepare and file taxes. Many people think that’s when scammers amp up their game. But the reality is that fraudsters are at work year-round using tax scams to try to trick you into giving them your money or personal information.

Types of Tax Scams

The IRS website stays up to date with the latest and most common tax scams. Most fall into one of these categories:

• Impersonation — Someone tries to convince you they work for the IRS to gain your personal information. These fraudsters don’t just target individual taxpayers — students and staff of universities, human resources personnel, and tax preparers also have been targeted.
• Misinformation — Scammers promise big refunds or tax credits if you use their service. In particular, scams have been reported about false preparers of the Employee Retention Credit, fake software to manually fill out W-2 forms with inflated income information to get big returns, or bogus entities that pressure people to use their services to settle tax debts or recover unclaimed refunds.
• Fraud — Someone files a fraudulent tax return, unemployment claim, or form to be eligible for a tax benefit using your stolen identity.

Protect Yourself from Tax Scammers

With a little knowledge and caution, you can do more to protect yourself against tax scams with these five tips:

1. Ignore emails, calls, and texts. The best way to avoid getting hooked by phishing scams is to know that the IRS contacts taxpayers by US mail. They don’t email, text, use paid delivery services, or try to connect with you by social media. And if the IRS does need to call you, they’ll do so after first sending you a letter through the US mail.
2. Safeguard personal information. Don’t give out details like social security numbers, account numbers, PINs, or passwords to people on the phone or through websites unless you’ve verified their legitimacy. Follow good practice of using unique usernames and passwords for all your online accounts and change them if you have been notified that an organization’s system has been compromised.
3. Never click on emailed links. Again, the IRS won’t email you. So that link won’t be legitimate, and it could contain malware that can infect your computer and steal your passwords and other personal information.
4. File early. The sooner you file your tax return, the less likely a fraudster will be able to file a fake return if they’ve stolen your identity.
5. Report scams, identity theft, and fraud. If you’re being scammed or think your identity was stolen and used to file false information, report it to the IRS to protect yourself and help them warn others.

But What If I Really Do Need to Talk to the IRS?

If you need help with understanding your taxes or settling your tax debt, go straight to the source. Go to IRS.gov and click the help menu to find the legitimate online and in-person resources that can help you. Keep these tips in mind and you can spot tax refund scams and protect yourself against falling prey to tax scammers.

^* UFCU does not provide tax or legal advice. For such guidance, please consult a tax and/or legal advisor.