Recently, the Internal Revenue Service (IRS) issued a warning to taxpayers about a new tax scam that aims to extract sensitive information by misleading people into thinking they are owed a refund. This particular hoax involves the victim receiving an official-looking cardboard envelope via mail or delivery service, with an enclosed letter on a fraudulent IRS masthead, with the wording “in relation to your unclaimed refund.” The letter then requests sensitive information, such as photos of driver’s licenses, which the thieves use for identity theft.
This is just one example of many attempts by would-be thieves to use confusion around the tax process to defraud unsuspecting individuals. With so many potential scams out there, it is vital that taxpayers stay vigilant to protect themselves against fraud. Read on for tips to keep in mind when evaluating a possible threat and the next steps to take if you have been the victim of tax-related fraud.
Tax Scam Warning Signs
Unfortunately, there is no shortage of fraud to be wary of. In fact, bad actors purposely utilize a variety of scam methods, including mail, email, phone calls, text messages, and more, to catch people with their guard down. The good news is that there are some general red flags to be on the lookout for that may help alert you to a potential hoax. They include:
- Unsolicited communications: Remember, the IRS will never initiate contact with taxpayers by email, text, or social media regarding a tax bill or refund.
- Threats and demands for sensitive data: Any message that threatens you with arrest, deportation, etc., or asks for confidential information like a photo of your driver’s license or bank numbers, should be considered highly suspicious.
- Incorrect punctuation and grammar: Scams will often include warning signs like unusual grammar or incorrect punctuation. If you receive a message with confusing wording or suspicious content, it may be a scam.
- Inaccurate information: Scammers use the presence of information like phone numbers, logos, or due dates to give them credibility. While these may look official at first glance, incorrect information is a red flag you should not ignore.
Next Steps if You Are the Victim of a Scam
If you believe you have been the target or victim of a hoax, here are some steps you should take to help the government stop would-be scammers and protect yourself moving forward:
- Do not engage with the scam: The most important thing to remember is never to respond to any inquiry that strikes you as suspicious. Do not open any attachments or click on any links contained within the message. Even sending a reply can give scammers the information they need to compromise your identity.
- Report it to the authorities: There are several places to report potential tax scams, including the FBI’s Internet Crime Complaint Center and U.S. Treasury Inspector General’s Phishing and Online Scams You can also report it via email at email@example.com. Finally, if the scammer successfully accessed your information, you will also want to file a police report so you have documentation of the incident for the future.
- Protect yourself moving forward: The federal government provides several tools to help taxpayers protect themselves against fraudsters. Some of these include The Dirty Dozen list, an annual roundup of the top 12 scams of the current tax year; the Notices & Letters Search tool, where you can verify the contents of messages you receive; and the FCC Smartphone Security Checker, which can help you increase the security of your mobile device.
As you can see now can be a busy time for scammers who are eager to take advantage of our willingness to share information and desire to receive any refunds we are owed. For this reason, taxpayers must remain vigilant against potential fraud to avoid being taken advantage of. If you have any questions about tax scams or for related information, please contact your friendly Newburg advisor.