American Dream

Watch Out! A Tax Scam Could Occur at Any Time of Year

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Tax season may be over, but scammers never sleep. No matter the time of year, you could find yourself the victim of a tax scam if you aren’t careful.

In 2004, the U.S. Treasury received more than 20,000 taxpayer complaints about fraud related to a sophisticated phone scam, according to a CBS MoneyWatch interview with J. Russell George, the Treasury inspector general for tax administration. CNN Money notes that as of March 2015, that same office was receiving as many as 12,000 calls per week reporting tax scams. Since October 2013, consumers have lost $15.5 million to scammers, according to Timothy Camus, the deputy inspector general. In May, the IRS reported that hackers had infiltrated its Get Transcript application and succeeded in accessing account information for about 100,000 taxpayers. It’s possible that fraudsters may use this information to perpetrate further scams.

If you want to avoid becoming the victim of a tax scam, you need to remain vigilant. While you can’t always prevent scammers from stealing your information, you can take steps to avoid being taken in under false pretenses.

Don’t Trust Emails and Phone Calls

Sophisticated scammers spoof caller ID to make it look like they are calling from the IRS, or they use the IRS logo on emails to look official. They might even have the last four digits of your Social Security number. Normally, they say you owe money and that if you don’t pay, you could face wage garnishment, prison, or driver’s license suspension. The IRS doesn’t communicate such information using these methods, instead sending official communications through the postal service. Additionally, the IRS won’t ask you to pay using a prepaid debit card or a wire transfer.

Beware the Tax-Filing Scam

Another tax scam to be aware of is the tax-filing scam, during which someone files a fraudulent return in your name and claims a refund. When you try to file, your return is rejected. To help avoid this situation, file your return as early as possible, and make sure your tax-filing software is up to date. Again, don’t file your taxes using an emailed link sent to you by someone claiming to be from the IRS. If you’re the victim of a fraudulent-return scam, you should contact the IRS Identity Protection Specialized Unit at 1-800-908-4490 and file a Form 14039 Identity Theft Affidavit.

Monitor Your Credit

Identity theft might not stop at a tax scam. Often, the next step is to open accounts in your name. To stop this from happening, regularly monitor your credit for red flags that could indicate identity theft. You are entitled to a free report from each of the major credit bureaus once a year, which you can receive through AnnualCreditReport.com. Many credit card issuers also offer credit-report access with your statement, so take advantage of those services. If you do notice fraud, immediately alert your bank and credit card companies and report it to at least one of the bureaus so they can place a fraud alert on your credit records.

Take steps to secure your information as much as possible. Don’t perform important financial transactions, including e-filing your tax return, via public Wi-Fi or a shared computer. Always use a secure connection to manage your money, and be sure to erase any important data after making a transaction.

With healthy skepticism about who’s contacting you and vigilance with your own information, you’re more likely to avoid becoming a victim of a tax scam.

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Miranda is a financial journalist and money expert. She covers business and finance topics for a number of outlets, including for U.S. News & World Report, Forbes, Huffington Post, Business Insider, and AllBusiness.com. Miranda also does corporate work for companies like H&R Block and Equifax. She lives in Pennsylvania with her husband and son, where she enjoys reading, travel, and the outdoors.