Tax ID Theft: How to Protect Yourself from IRS Scams

Criminals will stop at nothing to try and steal your money, including impersonating government agencies. IRS scams are some of the oldest in the scam artist’s playbook, and they’ve only grown more sophisticated in the digital age. But because everybody has to deal with the IRS, these types of scams have become well-known and you can easily find information about how to avoid them . Since we’ve previously covered the basics of IRS scams , this article will focus on one type of scam in particular: Tax ID theft. You’ll also learn what some of the latest IRS scams are and, of course, how to avoid them. Scam artists like to impersonate IRS and other federal agents, but they’ll also try to steal your identity to file a tax return under your name. They file fraudulent returns early in the tax season and then get the refunds deposited into their accounts. The Federal Trade Commission Consumer Sentinel Network reported 92,620 cases of employment or tax-related fraud in the first three quarters of 2020. Tax identity theft isn’t the most common type of fraud, and it’s also decreased in recent years thanks to efforts by the IRS, state tax agencies, financial institutions, and tax professionals. If someone has stolen your identity to file a fake tax return, the IRS will flag your legitimate return as a duplicate and possibly reject it. If you find out from another channel that your identity has been stolen (through your bank or credit card company, for example), you should warn the IRS so they can be on the lookout for a fake return with your information on it. Hackers are nothing if not innovative. They’ll always come up with new ways to pull a fast one on an unsuspecting taxpayer. Although some IRS scams may be well-known, new ones regularly pop up. Some of the latest scams to be aware of, according to NerdWallet , are: There are ways to tell if someone really is from the IRS or just a scam artist. For starters, the IRS never initiates contact with taxpayers by any means other than letters sent by mail. If the real IRS wants to contact you for some reason, they will not email, text, or call you, nor will they contact you via social media or leave you an unsolicited voicemail. Another red flag is if the form the “IRS” has sent you doesn’t appear on the IRS website. If you’ve received a form in the mail that you’ve never heard of before, look it up on the IRS website . IRS agents also have two forms of identification — a pocket commission and an HSPD-12 card. You can ask to see both and verify info on the HSPD-12 card by calling the IRS. The IRS will also never ask you to pay in gift cards, for a credit or debit card number over the phone, nor will they contact you out of the blue demanding money. The IRS also never threatens to arrest, deport, revoke driver’s licenses, or any other similar action against taxpayers who owe money. In fact, the IRS has certain rules to follow when dealing with taxpayers, called the Taxpayer Bill of Rights . It’s important to stay aware of the latest IRS scams and social security scams so you can protect yourself if a fraudster ever targets you. Know what their typical tricks are, but also use reason and sound judgment. If something seems suspicious, don’t respond to it and check with the real IRS.