Tax Refund Scams
Has the Internal Revenue Service (IRS) recently called you or sent a text or letter claiming you have an unclaimed refund? STOP! That communication is not from the IRS. According to the agency, there has been a recent rise in Tax refund scams. The IRS never initiates contact with taxpayers by email, text, or social media regarding a bill or tax refund.
A tax refund scam refers to fraudulent activities where individuals or organizations attempt to steal taxpayer money or personal information by posing as government representatives offering tax refunds. Even though these scams most often occur during tax filing season, the recent uptick shows it is always reasonable to be cautious. Here are a few scam approaches to familiarize yourself with to stay vigilant.
- Impersonation: Scammers may contact taxpayers through phone calls, emails, or text messages, pretending to be representatives from tax agencies such as the Internal Revenue Service (IRS) in the United States or the tax authorities in other countries.
- False Promises: The scammers will inform the victim that they are eligible for a tax refund or an additional refund and create a sense of urgency to entice the taxpayer into providing personal information or making a payment.
- Personal Information Theft: The scammer may request personal and sensitive information such as Social Security numbers, credit union account details, or credit card information under the pretense of refund processing. They may use this information for identity theft or sell it on the black market.
- Advanced Fee Scam: Another variation of the tax refund scam involves requesting an upfront payment or fee to process the refund. The scammer convinces the victim that paying the fee is necessary to release the refund, but once the payment is made, the scammer disappears without providing any refund.
- Phishing Attacks: Scammers may send fake emails or create fraudulent websites that closely resemble legitimate tax agency websites. These emails or websites typically prompt taxpayers to provide personal information or login credentials, which the scammers can use for malicious purposes.
Annually, the IRS composes a list of the worst tax scams called the Dirty Dozen. It is designed to familiarize consumers with the multiple techniques that scammers use. Knowledge is power. You are arming yourself with an understanding of how these tactics work to help you defend your information, identity, and finances from fraud.
If you receive a communication claiming to be from the IRS and are unsure if it is a scam, take it to your local credit union and ask for help discerning fact from fiction. Champions First Credit Union is happy to help you protect yourself. Anyone can fall victim to fraud. It is always better to pause and be sure before acting.
Taxpayers can help authorities fight against fraud by reporting scams to the Treasury Inspector General for Tax Administration or the Internet Crime Complaint Center. The Report Phishing and Online Scams page at IRS.gov provides complete details. Floridians can also report suspicious or fraudulent activity to Fraud Free Florida.