Tax day is less than three months away, and the Federal Trade Commission is encouraging taxpayers to be on guard for two potentially devastating scams: tax identity theft and IRS imposter scams.
As part of Tax Identity Theft Awareness Week, the FTC recommends filing early and staying on alert:
1. Tax identity theft is a kind of identity theft happens when someone files a fake tax return using your personal information—like your Social Security number—to get a tax refund. Tax identity theft also happens when someone uses your Social Security number to get a job. You find out about it when you get a letter from the IRS saying:
- more than one tax return was filed in your name, or
- IRS records show wages from an employer you don’t know
2. IRS imposter scams occur when scammers pose as the IRS. They call you up saying 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. Leaving you no time to think, 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) online or at 800-366-4484, and to the FTC at ftc.gov/complaint.
So what can you do about it? To lessen the chances of becoming a victim:
• File your tax return early in the tax season, if you can, before identity thieves do.
• Respond to all mail from the IRS as soon as possible.
• Know the IRS won’t contact you by email, text or social media. If the IRS needs information, it will contact you by mail.
• Get recommendations and research a tax preparer thoroughly before handing over personal information.
• Check your credit report at least once a year for free at annualcreditreport.com to make sure no other accounts have been opened in your name.
Remember, if you suspect you're a victim of identity theft, contact one of your providers. Your bank, credit union, insurer or employer may offer identity management services from CyberScout.