Each year in the United States, tax season provides con artists an opportunity to scam taxpayers out of their hard-earned money. It’s a serious problem that is only on the rise: according to the IRS, the number of potential victims for one common scam has skyrocketed from hundreds to several thousands in a matter of days.
These scams range from simple to sophisticated, but many of them are initiated using a single phone call.
Here’s how phone scammers are targeting taxpayers this tax season, and how you can spot an IRS phone scam.
The “Accidental Refund”
In the most recent variation of the phone-based tax scam, scammers attempt to convince taxpayers that the IRS has mistakenly awarded them a refund, and will ask for that refund to be “returned.”
In this scam, thieves have stolen tax data from individuals or tax professionals. They use that data to file fraudulent tax returns in taxpayers’ names, then have the IRS deposit refunds in the taxpayer’s actual bank accounts. Once the tax “refund” is processed, the scammers will contact taxpayers by phone (either by a live person or an automated call with a callback number), posing as the IRS and asking for the erroneous refunds to be returned.
Of course, when the taxpayer verifies that funds were really deposited in their account, this lends the scam the appearance of legitimacy. The scammer may use strong-arm tactics, including threats of jail time or arrest warrants, to convince you to pay them over the phone. Of course, those funds will go to the thieves, not back to the IRS.
The Collection Call
In another phone scam, thieves simply call taxpayers to collect funds they claim are owed to the IRS.
In this scam, you may receive a call (again, from a live person or an automated caller requesting a callback) from someone claiming to represent the IRS. The “representative” will claim that you owe the IRS money and demand immediate payment. They may threaten you with arrest, deportation, or suspension of your driver’s license. In some cases, they may promise a future tax refund.
The goal is simple: to get you to pay the scammer in the form of debit cards, gift cards, or wire transfer. If you give them personal information, they could also use it to claim any future tax refund or commit further identity theft.
Protecting Yourself from IRS Phone Scams
Knowing what constitutes normal behavior from the IRS will help you spot and avoid scams this tax season.
The IRS will never call you to demand payment over the phone, nor will they contact you about taxes owed without having first mailed you a bill. They will also never threaten to immediately involve law enforcement or have you arrested.
If you believe that you have been issued a refund as the result of a fraudulent tax return, the IRS has provided instructions for returning the funds. If you submit a tax return and it is rejected because the IRS already has a fraudulent return with your Social Security number on file, you can follow the steps detailed in the Taxpayer Guide to Identity Theft.
The IRS will never demand specific payment methods, such as prepaid debit cards, gift cards, or wire transfers, or demand payment without giving you the opportunity to research or appeal the amount they say you owe.
If you do get a phone call that rings alarm bells, you should hang up without sharing any personal information with the caller. If you do get a voicemail claiming to be from the IRS, don’t call back the number provided. Instead, you should contact the IRS through their official communication channels.
You should safeguard any personal information and tax data that you have on file. If you file your taxes with the help of a professional tax prepare, you should ask how they protect your personal information.