As the old saying goes: The only sure things in life are death and taxes. Well, I’m here to add a new one to this list: tax scams. Every year starting around January the scam artists ratchet up their scam machines and start grilling the elderly, desperate and greedy who are naive enough to believe what these conmen are selling. Every year they seem to get better at their schemes, so this year I thought I would give our readers a heads up on the latest and scariest tax and IRS scams being perpetrated on the U.S. population. So, sharpen your pencils tax preparers and learn about the latest tax and IRS scams lurking on the World Wide Web.
The first scam I am going to talk about is not exclusive to the Internet. In fact, it takes place mainly via the telephone and cellphone networks. However, since many now use voice over IP phone systems, these calls are taking place on the Internet as well. I had an up close and personal experience with this scam recently. I received a call on my Google Voice line that was very suspicious. Google Voice is an Internet voice line that forwards calls to my other lines as a follow me find me service. Here is what the caller said in a very robotic voice (this is the actual text message sent to me from Google voice).
“This is Marcus Brown and I am calling from fraud investigation department of IRS. The matter at hand is extremely time sensitive and urgent as afteraudit we found that there was a fraud and misconduct on your tax return which indicates you are hiding assets from the federal government. This needs to be rectified immediately. So, do return the call as soon as you receive the message. The number is 855-512-2378 again 855-512-2378. Thank you. Goodbye.”
After doing a reverse lookup on the phone number left, I discovered an IP address originating in China. China? Why would the IRS be contacting me from China! These calls persisted for multiple days, and they left three messages in all. Needless to say, these criminals are persistent, and this may be another reason why someone would fall prey to this type of scam. If you call and contact them, their pitch may sound convincing and sway or scare someone into coughing up financial information.
In an article from AOL Finance, I found statistics for this type of scam. This type of scam has been growing in numbers since 2013, and the latest stats listed by the IRS show that in 2014, 55,000 people complained about receiving these types of calls. To make matters worse more than 5,000 people fell for this type of scam to the tune of $26.5 million. Other articles I read also rated it as either the No. 1 or No. 2 scam this year.
The IRS does not call individuals or businesses unless it has already been in contact with you via snail mail. In an article from the Motley Fool called; 3 Tax Scams to Watch out for in 2017, it provides these five things that the IRS will never do:
- Call to demand immediate payment or call at all without first mailing you a bill.
- Demand that you pay taxes without an opportunity to appeal or question the amount owed.
- Require a specific payment method.
- Ask for a credit/debit card number over the phone.
- Threaten to have you arrested for not paying
Phishing is one of the most common types of scam on the Internet. These types of scams are not new, but they are ever increasing in quality and sophistication, making it harder for the average computer user to distinguish a phishing email from a legitimate communication. Many, if not most, of these scams, start by the criminals gathering information from social media sites. Some come from hacked email lists obtained from the many Internet business breaches that have made headlines in the last few years.
Such scams increase during the holidays as well as during the tax preparation season to take advantage of those not paying close attention to where their e-mails are coming from. Just for your information, the IRS never sends out e-mails soliciting information from taxpayers. If you get one of these e-mails, you can forward it to the IRS by sending it to email@example.com. By no means answer this e-mail or click on any links listed in it. Delete it immediately after forwarding it to the IRS. Check out our article that discusses many types of phishing schemes by reading: The Grinch Goes Digital – This covers 12 ways online scammers can steal from you this Christmas, also read, with The Endless Scams of Christmas (and beyond) and The Byte Before Christmas. These three-articles not only cover dozens of phishing scams, but they also provide many ways to thwart them.
This is an educational article about ID theft: “A Brief History of Identity Theft.” Here I found out that ID theft has been on the rise every year since the influx of Illegal immigration in 1965 that prompted the creation of the Immigration and Nationality Act. The creation and widespread use of credit cards accelerated this type of theft because there was now an easier way to perpetrate ID theft. ID theft is directly related to phishing schemes in most instances. This is how hackers and other cybercriminals often gain access to your social security number and ultimately your identity. However, don’t rule out old fashion dumpster diving and trash can scavenging. Criminals still use this avenue to gain access to information that ultimately leads them to deceive you and to steal your identity. In other articles, I have recommended that everyone should have some form of ID protection insurance. Many insurance companies offer them today. I also personally recommend Life Lock as it is one of the more comprehensive ID protection products on the market.
Many taxpayers look to contribute to their favorite charities because they would rather give to a charity than give that money to Uncle Sam in taxes. I know many now provide online donations because many charities are working hard to make it easier to donate. Cyber-criminals are aware of this as well. Many have raised the bar to enhance the look and feel of their fake charity websites and phishing schemes to fleece the giving public of their charitable donations. Be wary of any solicitation emails you receive from professed charitable organizations. Vet them thoroughly. Call their office to verify websites and procedures. We wrote about this in our article called: In Search of Digital Donations some time back. Make sure you check the IRS’s charitable organization Non-Profit Exemption List before you make any donations online.
Return Preparer Fraud
The majority of tax preparers out there are honest professionals working hard to get you the best tax return possible. However, there are criminals who use this profession as a disguise to commit fraud and steal your money. Many of these criminals set up shop and advertise the best return for your money or proclaim that they have discovered new tax loopholes that most other preparers haven’t heard of yet. They usually ask for a higher fee or worse use this scheme to acquire your financial and identity information to steal your money and your identity. In some cases, they sell your identity after they close up shop and move on. Make sure you check out the article on IRS.gov called: IRS “Dirty Dozen” Series of Tax Scams for 2017 Includes Return Preparer Fraud; Choose Reputable Return Preparers. It contains a checklist to help choose an honest and professional Tax Preparer.
On our notes page, I have included a long list of research articles to help our readers learn as much as possible about tax and IRS scams. Here is my short list of third party articles to help you get started.
- Dirty Dozen top tax scams led by phishing schemes
- IRS reveals the top tax scams of 2017 – AOL Finance
- Tax Scams / Consumer Alerts – IRS.gov
- A Real-Life Tax Scam: This Is What IRS Phone Fraud Sounds Like
- As tax season begins, avoid these five common scams – CNBC.com
Working the Web’s Short List of Internet Scam Articles
- The Hack Attack Is Back
- How to Stop Sir Spamalot
- In Search of Digital Donations
- The Cybercrime Clock is Ticking
- What’s at Stake When It’s Fake?
- How Freeware Can Cost You BIG
- Is Google Calling? Or is it Someone Else?
- How to Avoid Being Caught in an SEO Phishing Net
- Working the Web – Is There a Cyber Attack in Your Future?
- How to Spot Search Ranking Scams and Other Search Engine Enigmas
- Trick or Tweet? The Vulnerabilities Inherent to Twitter and All Social Networks
- Getting Faked Out On Facebook – Copy Cat and Facebook ID thieves – It can Happen to You
Avoid scams by following the suggestions and implementing the safeguards listed in this article and the other articles provided here. Don’t become a victim of cyber-crime. Cyber-fraud is the number one type of crime committed in the U.S. today. You can protect your identity and financial security, but it requires due diligence and vigilance. Take the responsibility to make sure you don’t become a victim. Begin by learning everything you can. Reading this article is a great start.