With another tax filing season underway, the IRS warns that taxpayers and tax professionals should remain vigilant as tax scammers attempt to steal taxpayers’ personal or business information and tax refunds. Following are some warning signs from the IRS that a call or letter might be a tax scam:
- Receiving unrequested information from the IRS, like a tax transcript or a new employer identification number, could be a sign that someone is fraudulently attempting to access a taxpayer’s personal or business information.
- Receiving a Form W-2, “Wage and Tax Statement,” from an employer the taxpayer never worked for could indicate that someone is using the taxpayer’s identity to gain employment and potentially commit tax fraud.
- Receiving unexpected notices or emails from a tax preparation company confirming access to information for an online account that the taxpayer did not create or disabling an existing account without the taxpayer’s knowledge could be a sign that someone is attempting to gain unauthorized access to the taxpayer’s tax information.
- Receiving letters from the IRS in a year the taxpayer didn’t earn any income or didn’t file a tax return could be a sign that someone filed a fraudulent tax return using the taxpayer’s identity. The IRS letter might mention that the taxpayer owes additional tax, that a refund was offset to pay a balance due, or that collection action has been taken against the taxpayer.
Unclaimed refund scam
A tax scam highlighted by the IRS in 2023 involves a letter that seems to be from the IRS informing the taxpayer that they are entitled to a refund that was never claimed. The letter asks the taxpayer to provide personal information – like a driver’s license picture, cell phone number, or bank routing information – to process the refund. The letter might come in a cardboard envelope sent using a private delivery service and has a letterhead that looks like it is from the IRS. The fraudulent letters often have odd punctuation, a mixture of fonts, or other signs that they are not legitimate.
The unclaimed refund scam also is being perpetrated using email. The email indicates that the taxpayer overpaid tax when they filed their Form 1040, “U.S. Individual Income Tax Return,” and, as a result, is due a refund. The email then asks the taxpayer to click on a link to provide bank information where the refund can be direct deposited. Scammers use the bank information to steal the refund from the taxpayer’s account.
Crowe observation
It’s important to stay vigilant and be aware of warning signs of potential tax scams and tax-related identity theft. Taxpayers that fall victim to a tax scam or tax-related identity theft should contact the IRS right away and take necessary steps to resolve any potentially fraudulent activity.
Looking ahead
Scams of all types are on the rise, and tax-related scams are no exception. The IRS states that it does not initiate contact with taxpayers by email, text, or social media about an unpaid tax bill or an unclaimed tax refund. Generally, the IRS first contacts taxpayers by mail delivered by the U.S. Postal Service. The IRS advises taxpayers that are unsure whether a letter, email, text, or call is from the IRS to call a number at the IRS known to be accurate, like the IRS helpline (+1 800 829 1040 for individuals, +1 800 829 4933 for businesses). In addition, the IRS website includes information on reporting and managing tax-related identity theft and scams for taxpayers that believe they might have been victims.
