Each year, tax return season brings out a multitude of scammers trying to steal refunds, create fake identities, and infiltrate bank accounts. Unfortunately, unsuspecting and legitimate taxpayers are vulnerable to significant financial losses. Luckily, there are proactive steps individuals can take, which includes being aware of the most common types of scams. Here are the top ones to look out for. 

4 Tax Scams and How to Avoid Them

1. Phishing 

Phishing emails will try to mimic the IRS and other tax authorities in an attempt to get recipients to share their personal details. These include Social Security numbers, bank account information, birth dates, and other data that can be used to submit fraudulent tax returns. 

Avoid sharing any personal information with unsolicited contacts. Never click on emailed links or download unknown files. 

2. Larger Refund Notice

Through email and texts, the notice will typically read that the IRS caught a miscalculation on a tax return, which will result in more money due to a taxpayer. 

This scam is a blatant attempt to get your personal information for access to bank and credit card accounts and take out loans in your name. As with phishing, never respond to these notices. The IRS will never ask for your personal information over email. 

3. Gift Card Ruse

With this scam, a thief will call you and say you owe federal taxes. They will also state that you'll be criminally charged if you don't pay a penalty fee. However, to be in compliance with the IRS, the fee must be paid through a gift card available at most stores. 

After the person buys the card and calls the scammer back, the thief will request the card's number and PIN and use it to go on a shopping spree. The IRS is aware of this common problem and continues to remind taxpayers that it will never request funds via a gift card. Ignore these calls and block them on your cell phone. 

4. Stimulus Payment Due

Unfortunately, the COVID-19 pandemic has presented another opportunity for scammers to dupe taxpayers. It typically starts with an email that says the recipient will receive a stimulus payment. The correspondence is fake because there weren't any new stimulus payments distributed in late 2021 and early 2022. Within the email, instructions are given to click on a link that asks for all your financials, which is just the information needed to commit identity fraud. Delete these fraudulent emails and never respond to them. The IRS will always use regular postal mail. 

Since 1986, the office of Selph and Friday, CPA has provided professional and confidential tax return preparation services. Based in Texarkana, TX, the licensed agency is 100% committed to protecting the privacy of its clients. With no minimum financial amount requirements and fast and efficient turnarounds, you can count on the team for superior customer service. Call (903) 792-0281 to schedule an appointment, and visit the website to see a complete list of services.