Common Tax Scams Every Taxpayer Should Know About

There is no nationwide system that tracks exactly how many people fall victim to tax scams. However, as scammers become more sophisticated and their technology continues to advance, the number of victims may have increased over the past several years.

In this video, we’ll cover some common scams targeting taxpayers, including fake IRS letters, email phishing scams, telephone scams, and more.

1. IRS Letter Scams

Even in today’s digital age, scammers still use traditional mail to trick people into believing they’re receiving legitimate correspondence from the IRS.

These scammers send fake tax bills designed to look like official IRS notices. Some letters claim to be related to the Affordable Care Act, while others falsely state that the taxpayer owes additional taxes or failed to pay the correct amount.

These scams can be particularly dangerous because fake notices may look remarkably similar to genuine IRS correspondence.

So, how can you tell if you’ve received a fraudulent letter?

Pay attention to suspicious addresses, payment instructions, and letter identification numbers. For example, a letter directing you to make a check payable to the IRS at the Austin Processing Center or displaying the letter number 105C may warrant further investigation.

If you receive a suspicious notice, don’t send payment immediately. Instead, verify its authenticity through official IRS channels.

2. Tax Transcript Email Scams

One common email scam involves messages containing an attachment labeled “Tax Transcript.”

A tax transcript provides a summary of information from your tax return. Scammers use the promise of accessing tax information to encourage recipients to open malicious attachments.

Instead of providing legitimate tax documents, these attachments may install malware on the recipient’s computer, potentially compromising sensitive personal information.

How can you recognize this scam?

Be cautious of unexpected emails claiming to come from the IRS, especially those containing attachments or requesting sensitive information. The IRS generally initiates contact with taxpayers through traditional mail and does not send unsolicited emails asking taxpayers to open attachments to access their tax transcripts.

If you receive an unexpected email claiming to be from the IRS, avoid clicking links or downloading attachments. Verify any tax-related concerns directly through the official IRS website.

3. IRS Telephone Scams

Telephone scams targeting taxpayers existed long before email phishing became widespread. However, scammers continue to refine their tactics to deceive more people.

These scams often begin with a phone call from someone pretending to represent the IRS. Calls may increase around tax season, although scammers can attempt this scheme at any time of the year.

The caller claims that the taxpayer owes money and demands immediate payment, often requesting payment by debit card or another method over the phone.

To pressure the victim into complying, the scammer may threaten additional penalties, legal action, or even jail time if payment isn’t made immediately.

Some scammers have also used caller ID spoofing to make their calls appear to come from a legitimate local IRS office. As a result, the number displayed on your phone may look genuine, making the scam more convincing.

So, how can you protect yourself?

Be suspicious of callers who demand immediate payment, threaten arrest, or insist that you pay using a specific method. The IRS does not demand immediate payment over the phone or threaten to have local police arrest you for refusing to pay.

If you receive a suspicious call, hang up and contact the IRS through an official phone number if you need to verify your tax status.

Conclusion

These are just a few examples of the many tax scams taxpayers may encounter. As scammers continue to develop new tactics, staying informed is one of the best ways to protect yourself and your personal information.

For more information about tax scams and other fraudulent activities to watch out for, visit our website today.

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