As Tax Day 2018 Approaches, Scams Multiply: 5 Things To Watch

Tax Day, the last day to file 2017 income tax returns, is just days away on April 17. And scammers are upping their game, the IRS said in a warning this week. Thousands of Americans have lost millions of dollars and their personal information in scams, the agency said.

If you’re in trouble with the IRS, you won’t find out about it by email, text messages or on social media. With a few exceptions, the agency contacts delinquent taxpayers by regular mail delivered by the U.S. Postal Service. When you do owe unpaid taxes, the IRS isn’t going to accept payment in the form of iTunes or other prepaid debit or gift cards, or by wire transfer.

That's not how it works.

There are some limited instances in which contact might be initiated in person, but that generally follows several letters from the IRS. Those in-person visits may come about in an attempt to get a delinquent tax return or employment tax payment, or to tour a business as part of an audit or during a criminal investigation.

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Here are some common scams that target taxpayers:

“Ghost” tax return preparers: Legitimate preparers have a valid 2018 Preparer Tax Information Number, or PTIN, which must be included on the tax return. Ghost or phantom preparers who put neither their name nor PTIN on the return should be regarded with skepticism. These criminals typically print the paper return for their clients and tell them to sign and mail it to the IRS. Or, for electronically-filed returns, they prepare it but won’t digitally sign it as the paid preparer. By doing so, the tax return appears to be self-prepared, with no indication that a paid tax preparer was used in completing the tax return —- helping keep the return preparer under the radar.

SEE ALSO: Last Day To File 2017 Taxes, Get Extensions: 11 Common Questions

Fake refunds: After they hack into a tax preparers' computer files and get information like your bank account number, criminals may deposit money, then claim the refund was in error and use various tactics to reclaim it. There are several versions of the scam as it continues to evolve. The IRS issued an alert in February after discovering several preparers’ computer files had been breached, and the number of potential victims jumped from a few hundred to several thousands in a matter of days, the agency said.

IRS-impersonation telephone scams: Recent immigrants are frequently targeted in a sophisticated phone scam. Callers claiming they’re IRS agents provide phony names and bogus IRS identification badge numbers, and they may know a lot about the people they’re calling, which makes the calls seem legitimate. The scammers typically alter the caller ID to make it look like the call came from the IRS and tell the recipient they must immediately pay tax debts through a gift card or wire transfer, then threaten them with arrest, deportation or driver’s license suspension if they don't. If victims are due a refund, the caller may trick them into sharing private information. “Urgent” callback requests are left with people who don’t pick up the phone. There are several variations:

• Some criminals use video relay service to try to scam deaf or hard-of-hearing individuals.
• Taxpayers who have limited proficiency in English are often approached in their native language.

Scams targeting tax professionals: Identity thieves are increasingly targeting tax preparers and redoubling efforts to gather information to file fraudulent federal and state tax returns. They use a phishing scheme that mimicks preparers’ software to steal PTINs and e-service passwords.

To report tax-related fraud, check this resource that explains the types of activity and the appropriate forms or other methods to use. You should also report instances of IRS-related phishing attempts and fraud to the Treasury Inspector General for Tax Administration at (800) 366-4484.

Taxpayers who experience tax-related identity theft may wonder when they should file a Form 14039, Identity Theft Affidavit. Check this resource to see if you should.

Read more about recent scams and what to do.

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