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Person filling out tax paperwork with pen with "Avoid tax season scams" text.
January 8, 2024

Four Common Tax Season Scams to Avoid

Scams can happen any time of the year, but they tend to be more prevalent during tax season. Scammers use tax refund time to target victims through various email phishing attempts, fraud schemes, phony phone calls and other deceptive activities. Watch out for four common tax season scams:

1. “I am from the IRS, and you will be arrested if…”

Beware of phone calls from anyone claiming to be an IRS employee or law enforcement officer. Fraudsters impersonate government officials to intimidate you, which is a form of social engineering commonly used by scammers. People trying to trick you might:

  • Promise to help you clear up your tax issues for a small fee.
  • Threaten to contact “the authorities” if you don’t do as they instruct.
  • Get angry if you ask them questions or resist their instructions.
  • Demand payment through unusual means, like gift cards or cryptocurrency.

If someone does any of these things, hang up immediately. If you are unsure whether you owe back taxes and want to verify, you should contact the IRS directly at their official, published phone number.

Fact: The real IRS will never call to demand immediate payment or threaten you. If a real IRS representative visits you, he or she will always provide two forms of official credentials: a pocket commission and an HSPD-12 card. You have the right to see these credentials and verify their identity with the IRS. Here’s how to know it’s really the IRS calling or knocking on your door.

2. “I am calling from the IRS. Please verify your information…”

Beware of phone calls, text messages or emails asking you to verify your personal information. Scammers may impersonate the IRS with fake phishing emails or calls aimed at gathering your personal information, such as your Social Security Number and bank account details.

Fact: The IRS will never solicit personal information over the phone or by email.

3. “I’ve completed your tax return. You’ll get a refund far larger than last year. Now, you just need to sign and mail it in…”

Beware of “ghost” tax preparers who fill out your taxes but will not sign the return. Instead of signing, these phony tax preparers will tell you to sign and mail it to the IRS. They usually promise you a large tax refund in exchange for a percentage of the return.

Fact: All legal, paid tax preparers must sign the tax return, and anyone operating otherwise is probably attempting to steal your money and information. Don’t fall victim to ghost tax preparers.

4. “I can get you tons of extra deductions to boost your refund, but I only accept payment in cash.”

Beware of tax preparers who require payment in cash only. Additionally, beware of tax preparers who do not provide a receipt, invent income to erroneously qualify their clients for tax credits, claim fake deductions to boost refunds or direct refunds into their own bank account rather than the taxpayer’s account.

Fact: Qualified tax preparers should operate ethically and transparently. You can report suspicious tax preparation practices to the IRS. Learn more about filing a complaint against a tax preparer.

The IRS urges taxpayers to review their tax returns carefully before signing and to ask questions if something is not clear. For any direct deposit refund, taxpayers should make sure both the routing and bank account numbers on the completed tax return are correct.

If you believe you may have fallen victim to an IRS tax scam, you should report it to the FTC and notify Grow Financial by calling 800.839.6328.

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