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12 of the Nastiest Tax Scams and How to Prevent Them

By
Services for Real Estate Pros with IDTheftSecurity.com Inc

Lets agree on this: Most of what’s written below will NEVER happen to you. Why? Because you are a subscriber to this newsletter and your propensity to consume security related content keeps you current on fraud prevention tactics.

So, this means you have a responsibility as a security conscious citizen to spread the prevention message below and make sure to specifically inform those in your life who are a bit more vulnerable. K?

Text message tax scams

Text message tax scams are a common form of phishing where scammers impersonate the IRS or other tax authorities to trick victims into revealing personal or financial information. Here's how these scams typically work:

The scammer sends a text message claiming to be from the IRS, stating that the recipient has an outstanding tax bill, is owed a refund, or needs to verify information. The message often includes a link or phone number to call for more details.

If the victim clicks the link, they are directed to a fake website designed to steal login credentials, credit card numbers, or other sensitive data. If they call the number, they may be asked to provide personal information or make a payment over the phone.

These scam texts aim to create a sense of urgency and fear by threatening consequences like account freezes or legal action if the recipient doesn't respond quickly. However, the IRS does not initiate contact with taxpayers via text messages, emails, or social media.

Key things to remember:

  • The IRS will never demand immediate payment, threaten arrest, or ask for credit/debit card numbers over the phone.
  • The IRS initiates most contacts through regular mail delivered by the United States Postal Service.
  • Never click on links or call numbers provided in unsolicited texts claiming to be from the IRS.
  • Report suspected tax scams to the IRS by forwarding the text to 202-552-1226.

By being aware of how these scams operate and the IRS's actual practices, taxpayers can avoid falling victim to text message tax fraud attempts.

Tax scam extortion phone calls

Tax scam extortion phone calls are a common fraudulent tactic where scammers impersonate government agencies like the IRS or law enforcement to trick victims into paying fictitious tax debts or fines. Here's how these scams typically work:

  • The scammer calls the victim claiming they owe back taxes or penalties to the IRS or other tax authority.
  • They use aggressive tactics like threats of arrest, deportation, or having the police sent to the victim's home to create a sense of fear and urgency.
  •  The caller demands immediate payment via wire transfer, prepaid debit cards, gift cards, or even cryptocurrencies to resolve the fake tax debt.
  • They often provide a fake case number, badge number, or callback number to appear legitimate.

Key things to remember:

  •  The IRS will never demand immediate payment over the phone, threaten arrest for not paying, or request payment via gift cards or wire transfers.
  • The IRS initiates most contacts through regular mail, not by phone calls.
  • Scammers often spoof caller ID to make it appear the call is from a real IRS or law enforcement number.
  • They may use personal information obtained illegally to make the call seem more credible.

If you receive one of these calls, hang up immediately. Do not provide any personal information or make any payments. Report the call to the Treasury Inspector General for Tax Administration and the Federal Trade Commission.

By recognizing the telltale signs of these extortion scams and knowing the IRS's actual practices, taxpayers can avoid falling victim to these fraudulent threats and demands for payment.

10 More NASTY Tax Scams

  1. Phishing Scams: Fraudsters often send phishing emails or text messages posing as the Internal Revenue Service (IRS) or tax preparation companies. These messages may claim you owe money or are eligible for a refund, and they typically include a link to a fake website designed to steal your personal and financial information.
  2. Ghost Preparers: Some unscrupulous tax preparers don't sign the returns they prepare, making it difficult for the IRS to track them down if there are any issues with the return. These "ghost" preparers may also manipulate income figures and claim fake deductions to increase refunds, leaving the taxpayer liable for penalties and interest.
  3. Identity Theft: Identity thieves may use your Social Security number to file a fraudulent tax return and claim a refund in your name. This can delay your legitimate refund and create a mess to untangle with the IRS.
  4. Fake Charities: Scammers often try to take advantage of people's generosity by setting up fake charities and soliciting donations, especially during tax season when people are looking for deductions.
  5. Inflated Refund Claims: Some unethical tax preparers may promise inflated refunds by claiming credits or deductions you don't qualify for, leading to potential audits, penalties, and interest charges.
  6. Impersonation Scams: Fraudsters may call or send emails pretending to be IRS agents or other government officials, demanding immediate payment for alleged back taxes or threatening arrest if you don't comply.
  7. Affinity Fraud: Scammers often target specific communities or groups, exploiting the trust and relationships within those circles to perpetrate tax-related fraud or investment schemes.
  8. Tax Preparer Fraud: Some dishonest tax preparers may alter returns without the taxpayer's knowledge to claim improper deductions or credits, pocketing a portion of the inflated refund for themselves.
  9. Employment Scams: Unscrupulous employers may pay workers under the table or misclassify them as independent contractors to avoid payroll taxes, leaving employees liable for additional taxes and penalties.
  10. Cryptocurrency Scams: With the rise of cryptocurrency, scammers may try to exploit the relative anonymity and complexity of these transactions to facilitate tax evasion or other fraudulent activities.

To avoid falling victim to these scams, it's crucial to be vigilant, verify the legitimacy of any communications from the IRS (they ONLY send letters) or tax preparers, and never provide personal or financial information unless you've initiated the contact and confirmed the recipient's authenticity.

Now share this. Please.

Robert Siciliano CSP, CSI, CITRMS is a security expert and private investigator with 30+ years experience, #1 Best Selling Amazon.com author of 5 books, and the architect of the CSI Protection certification; a Cyber Social Identity and Personal Protection security awareness training program. He is a frequent speaker and media commentator, and CEO of Safr.Me and Head Trainer at ProtectNowLLC.com.

Michael Elliott
Fathom Realty - Burlington Township, NJ
Burlington, New Jersey Residential Sales

I get at least 6 scam calls daily, I recognize their voices now.  I just followed you please follow me.  

Apr 05, 2024 12:58 PM
John Pusa
Glendale, CA

Hello Robert Siciliano thank you for these very important nastiest tax scams to avoid.

Apr 05, 2024 02:36 PM
Patricia Kennedy
RLAH@properties - Washington, DC
Home in the Capital

Years ago, I got a call from a Texas phone number saying he was a collection agent from the IRS - and at the time I probably was on their deadbeat list. But I still didn't fall for it. If these guys used all of their talents trying to make an honest living, they could probably make more money.

Apr 05, 2024 07:30 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Good morning, Robert. This is something I will definitely be sharing with my own data base.

Apr 27, 2024 05:47 AM