Co-authored by Sharon L. Palmer, ACP, FRP

It’s that time of year again. Of course, our thoughts are turning to preparing our income tax returns – and imagining all the different ways we can “invest” our tax refund! Perhaps a down payment on a new car, something new for your home, maybe that vacation you’ve been dreaming about, or even getting your estate planning done.

One thing is for certain – you’re not the only one who’s thinking of ways to spend your refund. Fraudsters and scammers are also looking for ways to get their hands on your hard-earned money. While the IRS does take precautions to prevent refund fraud, you must be vigilant to protect yourself as well.

Some of the top scams as reported by the IRS are as follows:

Telephone Scams

We’ve already had multiple clients call us indicating that they received a call from someone claiming to be from the IRS. The callers state that they owed money for taxes and threaten that they would be arrested and/or have their assets frozen unless they paid immediately by credit card over the phone.

On occasion, the fraudsters have even said to send the funds by Western Union. Know this for certain: the IRS NEVER makes initial contact by phone!

Valid communications from the IRS always come in the form of a mailed letter. The easiest way to protect yourself if you receive a phone call from someone professing to be from the IRS is to immediately hang up.

This advice also applies to anyone calling who claims to be from your employer’s payroll management company looking for information to complete your W-2 forms or claiming to have lost your W-2. If this happens, immediately hang up and contact your human resources department to alert them of the fraud attempt.

And it goes without saying: do not ever give your social security number to anyone on a phone request. If in doubt as to the legitimacy of a call, hang up and call the financial institution or other business requesting that information using its publicly-listed number.

Email and Malware Scams

These work very much in the same way as phone scams. Sometimes they even seem more legitimate because the emails look very official and use email addresses that look like those of the IRS or a trusted financial institution. They may even have the IRS seal or a logo like that shown below.

Do not be fooled by official looking emails!

Just like via phone, the IRS will NEVER make initial contact with you directly via email. Should you receive an email requesting personal information and/or payment, do not click on any links within the email in an attempt to determine whether the email is valid. They may link you to malware that allows a crook to access vital information directly from your computer.

The best way to protect yourself is to delete the email immediately. Then run your anti-viral software program to stop any potential contamination.

Early Filing Scams

It is possible that a fraudster may have already obtained enough of your vital information to file a tax return under your name and claim your refund. The IRS recommends filing your return as early as possible to avoid a scammer beating you to it.

Under a current pilot program, taxpayers in Florida and Georgia can also receive an “IP PIN” for secure online filing. Visit the IRS website here to apply for the PIN. Do not share this PIN with anyone other than your professional tax preparer.

While these scams come in the form of tax fraud, it’s important to remember that, once a thief has your tax information, they can use the same information for further identity theft, including taking over your bank accounts, charging on your credit cards, and applying for credit or loans under your name.

For more information on these and other tax scams, visit the IRS scam alerts page. Of course, if we can be of assistance on any of your tax questions, please contact our office at (904) 398-0900.