Many individuals rely heavily on their tax refunds every year to provide a much-needed financial relief. Their tax refunds can assist them in accomplishing a number of financial goals including paying down debt, establishing an emergency fund, or completing necessary home improvements.
With people looking for opportunities to get the most out of their refund, fraudsters use the tax season as a prime opportunity to trap unsuspecting consumers in financial fraud.
EdFed would like to raise awareness of some of the most common tax scams perpetrated today and share some helpful tips to protect yourself and detect potential fraud.
Common Tax Scams to Look Out For:
Email/Text Scams: Fraudsters may contact you via email or text message claiming to be from the IRS or tax preparation services such as H&R Block or TurboTax. The email or text message often appears legitimate, with the actual company name and logo. These scams attempt to collect personal and financial information including your name, credit card information, and Social Security Number. The messages also demand immediate payment or threaten legal action if you do not respond.
| Tip: Be cautious when receiving any unsolicited emails or texts. The IRS will never initiate contact with you via email or text. They will only send you an email or text message with your permission. You can verify the authenticity of the messages by contacting the IRS or other companies through their official website or published phone numbers. |
Imposter Phone Calls: Scammers may directly call individuals posing as representatives of the IRS and claiming that the consumer owes back taxes or penalties. Similar to the fraudulent email/text scams, the fraudsters use scare tactics including threats of arrest if the individuals do not pay immediately through gift cards, wire transfers, or even cryptocurrency.
| Tip: If you receive a call of this nature, immediately hang up and call the IRS at 1-800-829-1040. The IRS will never call you to demand an immediate payment or threaten to call law enforcement. The IRS also does not accept gift cards or prepaid debit cards as a form of payment. |
Social Media Scams: These scams have grown in popularity with the ever-increasing influence of social media platforms. Fraudsters create fake profiles or hack social media accounts to "offer" special tax advantages or loopholes, guaranteeing a larger tax refund and shorter processing times. They will then send fake IRS links to the consumers requesting information that ultimately results in fraud.
| Tip: Avoid social media offers that promise unrealistic tax refunds. If it sounds too good to be true, it probably is. Do not click on any links provided by an unsolicited profile or account. For accurate tax information, contact a tax professional or refer to the IRS website. |
If you suspect that you have been a victim of fraud, please contact EdFed's Loss Prevention Team at 305-270-5252 to immediately report any activity as potential fraud. |
