Tax season is already stressful for many of us, but scammers add more problems to the mix. And as we become savvier to their methods, they add new twists to their schemes.
New this year is a phishing scam that targets both taxpayers and tax preparers seeking e-Filing data and copies of driver’s licenses. It joins the growing list of scams the Internal Revenue Service (IRS) posts alerts about on its website, including scams involving threatening phone calls purportedly from the IRS, ghost preparers who never sign your return, and fraudsters who call you using spoofed Taxpayer Advocate Service phone numbers.
First, if you want to report a scam or have been a victim of a tax scam, here are steps to take immediately.
- Phishing (email and phone call scams): Forward email and information to firstname.lastname@example.org. Use the subject line “IRS Phone Scam” and include the phone number of the caller, the number you were told to call back, and a brief description of the communication.
- Phone calls: You can also report phishing phone calls to the Federal Communications Commission (FCC) through their Consumer Complaint Center.
- All scams: Report IRS scams to the Federal Trade Commission (FTC) via their online complaint form and with your local Attorney General’s office via their consumer complaint form. Californians can go here to file a complaint.
Red flag methods
And as a reminder, the IRS will never send you an unsolicited email or text message, or try to reach you through social media. The IRS will never call you demanding immediate payment using methods like prepaid gift cards or wire transfers. The IRS will never demand you pay taxes without the opportunity to question or appeal the amount. And they will not threaten to bring in local law enforcement or immigration authorities if you do not pay. The IRS lays out how to tell a genuine contact from the IRS from scammers on its website.
Here’s a rundown of some of the scams the IRS warns about this year. You can see the entire list at the IRS tax scams website.
EFIN scam targeting tax professionals
This is the latest of a growing list of scams targeting tax preparers. This new scam starts with an email sent to tax preparers saying it is from IRS Tax E-Filing with the subject line “Verifying your EFIN before e-filing.” The email reads:
In order to help protect both you and your clients from unauthorized/fraudulent activities, the IRS requires that you verify all authorized e-file originators prior to transmitting returns through our system. That means we need your EFIN (e-file identification number) verification and Driver's license before you e-file.
Please have a current PDF copy or image of your EFIN acceptance letter (5880C Letter dated within the last 12 months) or a copy of your IRS EFIN Application Summary, found at your e-Services account at IRS.gov, and Front and Back of Driver's License emailed in order to complete the verification process. Email: (fake email address)
If your EFIN is not verified by our system, your ability to e-file will be disabled until you provide documentation showing your credentials are in good standing to e-file with the IRS.
© 2021 EFILE. All rights reserved. Trademarks
2800 E. Commerce Center Place, Tucson, AZ 85706”
The scam asks tax preparers to email documents that would disclose their identities and EFINs to the thieves. The thieves could use that information to file fraudulent returns by impersonating the tax professional.
Variants on this scam include fraudsters posing as taxpayers who send attachments that, when opened, unleash malware on the tax preparer’s computer that tracks keystrokes to steal passwords or take over the computer. Some also involve ransomware, in which the thief gains control of the tax professionals' computer systems and holds data hostage until a ransom is paid. The Federal Bureau of Investigation (FBI) has warned against paying a ransom because thieves often leave the data encrypted.
Social Security Number scam
This one, first reported in late 2019, features a scammer calling a person directly or through robocalls threatening to suspend or cancel a person’s Social Security number if they don’t pay a certain amount of money immediately. The scammers usually want the money on pre-paid debit cards, gift cards, or through wire transfers.
If you receive one of these calls, do not give out any personal information. If in doubt whether it’s a genuine call, just hang up. See the list above of where to report those calls. If you do owe money to the IRS, you can see what you owe on the IRS website.
Spoofed Taxpayer Advocate Service calls
Spoofing is when a scammer uses a fake caller ID to trick you into thinking the call is coming from a legitimate source. In this latest scheme, fraudsters spoof numbers from the Taxpayer Advocate Service (TAS), an independent organization in the IRS that helps taxpayers resolve problems and issues.
In the scam, callers say they’re from the IRS and ask for personal information, including your Social Security number and taxpayer identification number. They may ask for immediate payment through shady means, like wire transfers or through pre-paid debit cards. In other cases, the caller says the taxpayer is owed a large refund and to get it, they need to share personal information.
Other techniques scammers use to be on the watch for:
- Scammers use fake names and IRS badge numbers to identify themselves.
- Scammers may know the last four digits of the taxpayer’s Social Security number.
- Scammers spoof caller ID to make the phone number appear as if the IRS or another local law enforcement agency is calling.
- Scammers may send bogus IRS emails to victims to support their bogus calls.
- Victims hear background noise of other calls to mimic a call site.
- After threatening victims with jail time or with driver’s license or other professional license revocation, scammers hang up. Others soon call back pretending to be from local law enforcement agencies or the Department of Motor Vehicles, and caller ID again supports their claim.
Ghost tax preparers
Ghost preparers get their name from the fact that they don’t sign tax returns they prepare, which can set off an array of problems for the taxpayer. Remember, you are ultimately responsible for your own tax return, even if prepared by someone else.
Bona fide tax professionals who prepare federal tax returns must have a valid Preparer Tax Identification number they include when they sign your return. If they don’t sign the return, it sends a red flag to the IRS that the preparer may be defrauding the client and trying to defraud IRS.
Other warning signs that a tax preparer may be trying to scam you include:
- Demand payment in cash and not providing a receipt
- Fudge income to qualify for tax credits
- Claim fake deductions to boost size of the refund
- Direct refunds into their own bank accounts, not the taxpayers’.
Need help finding a qualified tax professional? Check out the IRS’ tax preparer search tool to find a qualified professional near you.
Be careful out there
Scammers continue to get more sophisticated every year as new technology comes online and consumers get more wise to their methods. Protect yourself by keeping your guard up, knowing the signs of scams, and not reacting to threats or promises of big payouts.
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