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How to Avoid Tax Scams

It can be scary to find out you’ve been the victim of any kind of scam. The world is abounding with scams from all walks of life and some of the scariest are the scams pretending to be the IRS. How on earth do you know if you’re being scammed from the IRS? Pull up a chair and continue reading on to find out how to avoid becoming the next victim of an IRS tax scam.

I remember when I just started paying taxes and I received a call from someone who said they were from the IRS. They told me that I owed a significant amount of money. They were asking me to confirm my personal information, such as my name, address, social security number, birthdate, etc. Luckily, I did not provide any of that information. I started to ask them questions such as, “Why are you requiring this information? Shouldn’t you already have this?” As soon as I started to question their questions, they ended the call. Luckily, I was able to make sure that they did not get any of my information however, there are times where people are not so lucky.

Technology Age

With us living in a technology-driven age there are numerous tax scams showing up everyday. These scammers have a unique way of knowing the vulnerable people that may provide information without second guessing. Most of the times, the scammers are reaching out to elderly and new taxpayers. With COVID-19, there were even more scams happening than previous years. They have been reaching out via emails, phones and even able to create ads for some websites for you to click on. You want to make sure that you are staying alert and trying to avoid tax scams. If for any reason you suspect you’re a victim of a scam or a recipient of a scam, you are able to report this to the IRS or your local law enforcement.

Types of Tax Scams

KEEP IN MIND – THE IRS WILL NOT CALL – EMAIL – OR TEXT YOU. The IRS communicates by sending letters directly to you.

Most people don’t realize that mail is normally the only form of communication the IRS will make with you. Most times, the IRS is just reaching out to advise that they have received your tax return, advise that they have refunded you, or most recently, to advise of stimulus payments being deposited or sent to you. If you ever receive any other type of communication from the IRS, it is most likely a scam and unfortunately, scams are on the rise.

What to look out for:
  • Phone – Being in the tech age, scammers have learned how to create fake phone numbers with caller IDs, so the person receiving the call may not even realize they are being scammed. The people calling will sound scripted, like they are reading from a piece of paper that was detailed and written out to make them sound like they are really calling from the IRS. They will ask questions for you to verify, such as: Name, Date of Birth, Social Security Number; sometimes even asking for bank account information. Some scammers have used intimidation to get people to pay over the phone by threatening that you will be arrested for not paying your taxes. If this happens to you call your tax advisor or give us a call to discuss what happened. 
  • Text – This is the newest form of scams. There have been computer generated texts that have been sent to some US residents advising of a deposit, or a withdrawal from their banks. 
  • Email – Scam emails are sent out to taxpayers advising they will provide assistance for any funds owed to the IRS. The emails may claim that you owe a significant amount of money to the IRS and they are reaching out to help you lower the amount owed. In the email, it may even provide a location to send a third-party check. They may even provide a link to their website for you to log in and verify your personal information. NEVER click on the link in an email. Go directly to a browser and type in the website address yourself. 

If anyone asks for a third-party check, this should raise a red flag that there is some suspicious activity occurring. Make sure you do not send any information to anyone that is just asking to obtain from you.

What happens if you accidently provide the information that is being asked?

If you get caught up and provide the information that was being asked of you, you need to make sure that you stop and try to retract any information as you can. If you happened to provide any banking information, it is suggested to reach out to you financial institution for assistance in blocking any large withdrawals or purchases with your account without your permission. Sign up for identity protection and monitoring to make sure to stay on top of anyone using your personal information.

What to Do if You are a Victim of a Tax Scam

If you feel you are a victim of a tax scam, you need to make sure that you:

  • Notify the IRS
  • Notify Law Enforcement
  • Send any phishing emails to the IRS
  • File a complaint with the Federal Trade Commission
  • Notify credit bureaus and your financial institution

Ways to Prevent Tax Scams

Now there are ways that you can prevent becoming a victim of a tax scam. You want to make sure that you are not providing any information that calls and asks for your personal information. Another thing to do is to file your tax return early. There are times that the scammers will reach out to taxpayers who they think have not filed a tax return as to obtain information from you. It is also suggested to use a dedicated tax advisor team, such as Molen and Associates, to assist with your tax needs. This way you can have peace of mind knowing that your taxes are being handled with knowledge.

As stated, the only communication the IRS will provide is via US Mail. You can receive a letter from the IRS for any reason. If you do receive a letter from the IRS, you can reach out to Molen and Associates and our dedicated tax team will be happy to assist you with the next steps and the best options for you to proceed.

We Can Help

We can never get away from tax scams as there are new ones daily. However, we can all work together to try to prevent the scams from happening. Molen and Associates is open all year for any of your tax questions and we can assist if you feel you are being targeted for a tax scam. Reach out to us at 281-440-6279, and our dedicated tax team is available to answer any of you tax questions.

Jessica Powaserys
Professional Advocate





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