Tax scams have gained popularity with criminals in recent years as a way to effectively intimidate individuals with threat of legal action or arrest due to their “unpaid” tax bill. With tax season upon us, it is likely that you’ll be receiving calls from the public regarding these crimes. Here’s what you need to know.
The most common types of tax scams usually come in the form of a phone call or email threatening the victim with legal action or arrest if they do not pay the taxes that they “owe.” These scammers generally ask the victim to send money through pre-paid cards or wire transfer. The IRS will never call or email an individual without first contacting them through the mail, and they will never ask for payment through pre-paid cards or wire transfers.
- If someone believes that the threat of owing the IRS money is legitimate, they should not respond in any way to the email/phone call. They should call the IRS directly at 800-829-1040. There are specialists at the IRS that tell them if they owe money and how to set up a plan to pay if they do.
If someone has already fallen victim to a tax scam, they have already taken the first step by calling you and filing a report (when appropriate); however, they should also:
- Report the information to the U.S. Treasury Inspector General for Tax Administration (TIGTA) at either by calling them at 800-366-4484 or at http://tigta.gov.
- Report the information to the Federal Trade Commission by calling 877-FTC-HELP (382-4357) or by going to http://ftc.gov/complaint.
- Contact the State Attorney’s Office. You can find your local SAO by visiting this website.
- If the victim gave the perpetrator any personally identifying information such as their social security number, date of birth, bank account information, they should:
- Contact their financial institution.
- Contact the Social Security Administration at 1-800-772-1213.
- Contact their credit card company and the credit bureaus (they can place a free 90-day fraud alert on their credit reports): Equifax (888-298-0045); Experian (888-397-3742); TransUnion (888-909-8872).
Tax-related identity theft can also occur around this time of year. This occurs when a criminal uses the victim’s social security number to either file for and receive the victim’s tax return or obtain a job under the victim’s social security number. This scam is usually found with the victim receives their W-2 form and sees that there is an unknown employer listed or files their tax return only to find out that it has been filed by someone else. In addition to placing fraud alerts on their credit reports and filing with the reporting agencies, the victim should also:
Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490. They will be asked to send a copy of their police report or an IRS Identity Theft Affidavit along with proof of their identity such as a copy of a passport or driver’s license.