AARP Fraud Expert Explains Common Tax Scams Ahead of Filing Season
Tax season officially begins on January 27, according to the Internal Revenue Service (IRS). As taxpayers across the country start to organize their documents, fraud experts warn that this is also prime time for scammers. Martin Bailey, a Fraud Watch Network representative with AARP and a seasoned Community Ambassador, highlights the importance of vigilance to avoid falling victim to tax-related scams.
Common Tax Scams to Watch Out For
Bailey identifies two of the most prevalent scams during tax season: tax identity theft and IRS impostor schemes.
Tax Identity Theft
Scammers use stolen personal information, such as Social Security numbers or financial details, to file fraudulent tax returns. The goal is simple: claim refunds before legitimate taxpayers have a chance to file.
“They use fraudulent documents, submit the tax return to the IRS, and the IRS processes the return and pays the scammers instead of you,” Bailey explains. “Victims usually only discover the theft when they receive a letter from the IRS saying their refund has already been issued or their taxes have already been filed.”
IRS Impostor Scams
Fraudsters also frequently impersonate IRS employees to intimidate victims into paying fake tax bills. These impostors use phone calls, emails, and text messages to convince people they owe money and must pay immediately to avoid penalties or legal consequences.
“The IRS will never contact you by phone, email, or text. They always communicate by regular mail,” Bailey emphasizes. “If youxxxxxxntactexxxxxxxxxxxxxxxxxxxxxxxd by someone claiming to be from the IRS, ask for their name, badge number, and a callback number. Then hang up and contact the IRS using a verified number to confirm if the call was legitimate.”
Steps to Protect Yourself This Tax Season
Bailey offers several practical tips to help taxpayers safeguard their personal information and avoid scams:
- File Early: Filing your tax return as soon as possible reduces the window of opportunity for scammers to file a fraudulent return using your information.
- Secure a Personal Identification Number (PIN): The IRS offers an Identity Protection PIN (IP PIN) program to add an extra layer of security to your tax return. This six-digit PIN ensures that only you can file a return in your name.
- Shred Documents: Any documents containing personal or financial information should be shredded if no longer needed. This prevents scammers from retrieving sensitive data from discarded paperwork.
- Verify Your Tax Preparer: Ensure your tax preparer has proper credentials and a valid Preparer Tax Identification Number (PTIN). Check reviews and verify their standing with the IRS before entrusting them with your sensitive information.
- Use Secure Networks: Avoid filing your taxes or accessing sensitive financial information over public Wi-Fi. Use a secure and private network to protect your data from cybercriminals.
- Be Skeptical of Unsolicited Communications: Always verify the authenticity of any communication claiming to be from the IRS. If you receive a suspicious call, email, or text, report it to the IRS or the Federal Trade Commission (FTC).
What to Do If You’re Targeted
If you suspect you’ve been targeted by scammers or believe you may be a victim of tax identity theft, take immediate action:
- Contact the IRS at 1-800-908-4490 for identity theft-related inquiries.
- File a complaint with the FTC at IdentityTheft.gov.
- Place a fraud alert on your credit file by contacting one of the three major credit bureaus: Equifax, Experian, or TransUnion.
- Regularly monitor your credit report and financial statements for unauthorized activity.
Year-Round Vigilance Is Key
While tax season is a peak period for scams, Bailey stresses the importance of protecting personal information all year long. From securing financial documents to using strong, unique passwords for online accounts, every step taken can help reduce the risk of falling victim to fraud.
“Scammers are becoming more sophisticated,” Bailey warns. “Being proactive and informed is your best defense.”
For more resources and tips on protecting yourself from tax scams and other fraudulent activities, visit the AARP Fraud Watch Network or the official IRS website. Stay safe and informed this tax season to ensure your hard-earned money stays in your pocket.