It’s that time of year — tax time. It’s also time to be on guard for tax-related scams. Tax-refund fraud is expected to be a staggering $21 billion in 2016, a $14.5 billion jump from 2014. For Tax Identity Theft Awareness Week, January 25-29, we’re here to talk about ways tax scammers might target you and what you can do about it.
Tax identity theft
Tax identity theft is when someone files a fake tax return using your personal information, like your Social Security number, to get a tax refund, or when someone uses your Social Security number to get a job. If you’re a victim of this kind of theft, the IRS will send you a letter stating one of the following:
- More than one tax return was filed in your name
- IRS records show wages from an employer you don’t know
IRS imposter scams
With IRS imposter scam, scammers aren’t pretending to be you — they’re posing as the IRS. They call you and say you owe taxes, and threaten to arrest you if you don’t pay right away. They might know all or part of your Social Security number, and they can rig caller ID to make it look like the call is coming from Washington, DC – when it could be coming from anywhere. In a high-pressure situation, they tell you to put the money on a prepaid debit card and tell them the card number right away.
The real IRS won’t ask you to pay with prepaid debit cards or wire transfers, and won’t ask for a credit card number over the phone. When the IRS contacts people about unpaid taxes, they usually do it by mail. You can report IRS imposter scams to the Treasury Inspector General for Tax Administration (TIGTA), and to the FTC.
IdentityTheft.gov is the federal government’s one-stop resource to help you report and recover from identity theft. You can report identity theft, get step-by-step advice, sample letters, and your FTC Identity Theft Affidavit. These resources will help you fix problems caused by the identity theft.