How to Help Protect Yourself Against Common Tax Scams

February 27, 2024 |
Article | 5 min
| Personal Insights

Fraudsters today are smarter than ever. As technology advances, so do their tactics. As a consumer, you need to be aware of the latest fraud schemes to help protect yourself. Let’s discuss some ways scammers are impersonating the IRS to trick victims and steal your hard-earned cash.

IRS Impersonation Scams

If you’re like most of the U.S. population, you’ve probably screened some phone calls from scammers. During tax season and beyond, con artists are capitalizing on impersonation. They make unsolicited calls claiming to be IRS officials, demanding the victim pay a bogus tax bill. The fraudsters convince the victim to send cash, usually through a wire transfer, prepaid debit card, gift card, or, increasingly, cryptocurrency. They may also leave “urgent” callback requests through “robo-calls” or try multiple channels, including phishing emails.

Many phone scammers use threats to intimidate and bully a victim into paying them. They may even threaten to arrest, deport, or revoke the driver’s license of their victim if they don’t receive the money. Be aware of the signs.

Scammers can alter caller ID numbers to make it look like the IRS or another agency is calling. The callers use IRS employee titles and fake badge numbers to appear legitimate. They may use the victim’s name, address, and other personal information to make the call sound official.

Stay vigilant and aware when talking to someone suspicious. They may be a scammer. Here are a few red flags to keep in mind when taking calls from someone you don’t know.

The IRS Will Never:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
  • Demand taxes be paid without giving taxpayers the opportunity to question or appeal the amount owed.
  • Ask for credit or debit card numbers over the phone.
  • Call you about an unexpected refund.

How to Avoid IRS Impersonation Scams

It can be very unsettling to be the recipient of one of these scammers’ calls or emails. However, if you are suspicious of the signs, it’s well within your rights to verify the claims that the person is making. Here’s what to do if you are ever in a situation with a fraudster.

  1. If you are on the other end of the phone with a suspicious caller, hang up the phone or delete the email immediately. Do not provide any personally identifiable information to the caller.
  2. If you ever receive a call or email claiming you will be arrested due to a tax debt, do not call the number provided in the phone message or email you receive. Verify the validity of the claim with your tax professional or call the IRS directly. You can contact the IRS at 800-366-4484.
  3. File your taxes promptly. While thieves may use stolen information to create fraudulent bank accounts, they may also use it to file fraudulent tax returns. File your taxes as soon as you have the tax information you need and respond promptly to letters sent to you by the IRS.

Your team at Illinois Bank & Trust, a division of HTLF Bank is here to help protect you from these types of fraud and schemes. To learn more about these and other scams, visit our fraud protection resource center.

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