During tax season, the amount of sensitive information sent online or through the mail skyrockets – and so does the risk of identity theft. Scams are becoming increasingly sophisticated, making them difficult to detect and avoid. Staying informed is crucial to staying safe.

Tax identity theft, a prevalent type of imposter scam, occurs when criminals use your Social Security number to file a fraudulent tax return to claim a refund, claim your child as a dependent, or gain employment. Identifying, avoiding, and protecting against these tax scams is vital to navigating tax season safely.

Identifying Common IRS Imposter Scams

Keep It Private: Using a public network – such as free Wi-Fi at airports or libraries – puts any information you enter at risk of being compromised because public internet connections lack the same security features as private networks. Never enter sensitive financial or identifying information online when connected to the public network.

Awareness is your first defense against IRS imposter scams, helping you spot and avoid them. Here are three of the most common tax scams that you should be familiar with:

• Tax collection scam: Beware of calls from someone posing as an IRS official, claiming you owe taxes and demanding immediate payment. The fake official may threaten to arrest you, take your driver’s license, or – if you’re an immigrant – deport you. They often request odd payment methods, such as cashier’s check, wire transfer, gift card, or prepaid debit card. If you get a call like this, hang up immediately. The IRS will never use phone calls as the first means of contact for taxes owed.
• IRS verification scam: In what’s called a phishing attack, you may receive an official-looking email that appears to be from the IRS and asks you to verify your personal information. In truth, it’s scammer trying to access your personal information and steal your identity. If you receive an unexpected email from the IRS, it’s NOT the IRS. To protect yourself, don’t click on any links or download attachments that may contain malicious software. Check the sender’s email address, too. If it contains typos, abnormal characters, or doesn’t match email addresses used by the IRS, then it’s not from the IRS.
• Tax transcript scam: A tax transcript summarizes your tax return for a specific year. Lenders may request your tax transcripts to verify your income for financing, such as a mortgage or auto loan. This scam involves emails from “IRS Online” that appear to contain official tax transcripts. These emails include attachments (the supposed “tax transcripts”) containing malware, which can compromise your device and its information. Never open attachments in unsolicited or suspicious emails.

Understanding How Thieves Harvest Your Information

Tax identity thieves can gain access to sensitive information in several ways, including:

• Searching through your garbage or physical mail
• Gaining access to your digital device, your IRS account, or your tax preparer’s system, such as through malware
• Stealing your information from their place of employment, like your healthcare provider or a restaurant
  you visited

Ensuring secure document disposal and password practices can help keep your information safe.

Strategies for Protecting Yourself

Safeguarding against identity theft during tax season requires proactive strategies and vigilance. Follow these tips to help protect your sensitive information:

• Keep your Social Security number safe and secret, sharing it with as few people as possible.
• File your return as early in the tax season as possible.
• Shred all mail and documents that contain identifying or financial information instead of tossing them in the trash.
• Use secure, IRS-recognized platforms and software if filing electronically.
• Use passwords that are a random combination of letters, numbers, and special characters.
• Never use the same password twice – or share a password with anyone else.
• Mail your tax return directly from the post office to prevent theft if you are not filing electronically.
• Enable multifactor authentication for all financial and tax accounts wherever possible.
• Install cybersecurity software with firewall and antivirus protections on devices that hold personal information.
• Update devices and software to the latest version to ensure you have the most recent security patches and protections.
• Review tax preparers extensively before trusting them with your personal information.
• Check your credit report at least once a year to detect unauthorized accounts and other fraudulent activity.

You can request a free copy of your credit report once every 12 months at annualcreditreport.com.

Knowing If You’ve Been Targeted

Understanding when and how the real IRS will contact you is essential.

If you owe taxes, the IRS will typically send you a physical letter, called a “notice,” in the mail before attempting to contact you through other means. You can also monitor your tax account through the IRS website to detect fraudulent activity early. The IRS will never:

• Contact people through text messages or social media
• Call and demand immediate payment without giving you the opportunity to question or appeal the amount you allegedly owe
• Request you use a specific or unconventional payment method, like gift cards or prepaid debit card
• Ask for credit or debit card numbers over the phone
• Use intimidation or threats of arrest, deportation, or driver’s license revocation to coerce payment

If you encounter any of these situations, don’t engage! It’s a tax scam.

Other signs that you may be a victim of tax identity theft or ID theft attempts include:

• Receiving official tax transcripts in the mail that you didn’t request
• Being assigned an Employer Identification Number when you didn’t request one
• Getting a letter from the IRS about a suspicious tax return that you don’t recognize
• Being unable to file your tax return due to a duplicate SSN
• Receiving an IRS notice about account changes you didn’t make, such as a new account being opened or an existing account being disabled
• Receiving an IRS notice about taxes owed or collection actions for a year in which you didn’t file a return
• Showing income in your IRS records from an employer you don’t recognize

Responding to Suspicious or Fraudulent Activity

If you believe you’ve been targeted by an IRS imposter scam, promptly report it to the appropriate agency or agencies:

• Phishing attempts: Forward suspicious emails, texts, or other electronic messages claiming to be from the IRS to phishing@irs.gov.
• IRS imposters: Report imposters to the U.S. Treasury Inspector General for Tax Administration at tigta.gov/reportcrime-misconduct.
• Unauthorized SSN usage: If you suspect someone has used your SSN to file a tax return but have not received a letter about a suspicious return from the IRS, report it to the IRS. You can call them at 800.908.4490 for specialized help with identity theft and related tax account issues. You should also report it to the Federal Trade Commission at IdentityTheft.gov.

Victims of tax-related identity theft should file IRS Form 14039, Identity Theft Affidavit, to inform the IRS of the situation details and how it might affect their taxes. From there, professionals will investigate and work to resolve the case. Keep detailed records of all communications with the IRS and related organizations when handling identity theft, both for your personal records and to lessen the chances of future disputes.

Stay Informed About Scams

Tax identity theft can be hard to prevent and even harder to recover from – but not impossible. The IRS posts regular news about the latest tax scams and identity theft updates, making it easy to stay in the know, and they offer extensive online resources to educate taxpayers about identity theft, how to protect against it, and how to respond.

By recognizing common IRS imposter scams, protecting your information, and reacting appropriately if targeted, you can minimize the threat these fraudsters pose to you, preserving your financial well-being. Reach out to us today to discuss other ways to protect your financial health.