How to Fight Off Tax Fraud
It’s just like that old saying… there are only a few certain things in life: death, taxes, and tax scams at the start of the new year. As we enter 2022 and the upcoming tax season, be on the lookout for the tax scams that come with it.
Posing as IRS officials, thieves actively attempt to steal your personal information around this time of year. But with a little know-how and some free resources, protecting yourself is easy (and definitely easier than actually doing your taxes).
Securing Your Personal Information is Step One
Before a scammer ever tries to initiate contact with you, they may already have enough information to file a tax return. All they need is your name, address, and Social Security Number to create a fake federal W-2 form that’s then submitted to receive your tax refund. Fortunately, there a couple ways to get ahead of them.
The key way to prevent this from happening is to keep your personal information secure around the clock. Check out our article on how to protect your most sensitive personal info. And consider signing up for the IRS’ IP PIN program, which stops a fraudster from ever filing a fake return using your SSN or individual Taxpayer Identification number.
Know How the IRS Contacts You
If the scammer doesn’t have what they need to file a fraudulent tax refund, they’ll resort to phishing and try to trick you into providing it to them. Oftentimes, they’ll communicate in the form of a suspicious email or text message —this is a major red flag to watch out for.
The IRS will never text, email, or contact you on social media. Receiving any of these personal messages is a sure sign that you’re being targeted by a tax scam. They’ll only contact you via phone call or mail. And if they call, they’ll never leave a prerecorded voice mail message.
To get a better idea how the IRS reaches out, take a look at their guide here. If anything, just remember this: the IRS is old school. Any message you receive from them will be either in-person, by phone call, or by mail.
Never Pay with Gift Cards or Prepaid Debit Cards
If an IRS “official” is asking you pay them back in gift cards or prepaid debit cards, it’s a dead giveaway that they’re trying to scam you. The fraudster will typically ask for you to buy a certain type of gift card like Google Play or iTunes, request for the numbers on the card, and then redeem it themselves — scamming you out your hard-earned money.
Note that the IRS will never ask for payments via gift or prepaid card. Even though it’s always hard to turn down an Olive Garden gift card, they only accept more traditional payment methods. You can check out the list — as well as the pros and cons of each — right here.
Reporting a Tax Scam
Think you’ve been a victim of tax fraud? There are a couple things you should do ASAP. First, be sure to let us know immediately. We’ll do our best to stop the scam from going through and protect your personal and financial information from further impact.
After that, be sure to contact the IRS to report it. There are multiple ways to relay your experience their way. Just know that you’re not alone — tax fraud impacts millions of Americans each year. But with more awareness and constant vigilance, you can stop it from.