Whether scam artists use your information to file tax returns in hopes of getting your refund or pose as IRS agents and threaten legal action if payments aren’t immediately made – there are preventative steps you can take to ensure a smooth tax season. The Illinois CPA Society outlines key points than can help you avoid becoming a target and what to do if you think you’ve fallen victim to a scam.
Tax ID Theft Warning Signs
The IRS estimates that recent crackdowns in 2016 on ID theft scams stopped more than 785,000 fraudulent returns, but that $239 million in “suspect” refunds were paid out. Tax ID theft is still very prevalent and some warning signs to look for if you think you may be a victim are:
- Your electronically filed tax return is rejected because a return with your SSN already has been filed.
- Receiving a letter from the IRS asking for confirmation on submission of a tax return being held for review.
- Being informed by the IRS that that records of wages were received from an employer that you did not work for.
- File your tax return as early as possible.
- Arrange for your tax information forms to be delivered to you electronically during tax season (W-2s, 1099s, etc.).
- Monitor your credit report for unusual activity.
- Avoid using public wi-fi internet connections to send private information.
- Shred old financial documents.
- Make sure to encrypt any tax information sent via email with a password.
Impersonating IRS Agent Scams
Sophisticated phone scams, where callers claim to be IRS agents, are meant to scare people into making immediate payments. The IRS says it does not do the following:
- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.
- Call you about your tax bill without first sending you a bill in the mail.
- Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying or threaten a lawsuit.
- Demand you pay taxes owed and not allow you to question or appeal the amount.
- Ask for credit or debit card numbers over the phone.
Remember, scammers may call using IRS caller IDs to appear legitimate.
What to do if Tax Fraud Happens?
If the worst does happen and you become a victim of tax fraud and/or identity theft, help is out there. Taxpayers should file a Form 14039, Identity Theft Affidavit, only if their return is rejected because a tax return with their SSN already has been filed. Also, Identitytheft.gov is the Federal Trade Commission’s go-to resource for anyone having to begin the step-by-step process of reporting identity theft and restoring financial records.