Businesses and taxpayers, in general, are well aware of all the dangers associated with tax scams. Con artists who carry out tax scams have a wide range of tactics and loopholes to exploit unwary businesses and taxpayers. They illegally gain access to confidential data, which they can monetize later on. Here are the top three tax scams to look out for this season.
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1. IRS-Impersonation Telephone Scams
This is an elaborate and sophisticated phone scam which targets incautious taxpayers. Con artists or data thieves call unsuspecting taxpayers and claim to be representative of the IRS. They go as far as furnishing fake IRS aliases and identification badge numbers and even use caller ID hacks to seem like the call originated from the IRS itself.
Victims are usually told that they have an outstanding amount which has to be paid to the IRS as soon as possible. If the victim starts asking questions or refuses to go along with their rouse, then they start to threaten the victims.
They also throw around many bogus charges like arrest, suspension of business license, and may even become hostile over the phone. They even dupe victims by telling them about a fake refund, which compels the victims to share their personal information. Always keep in mind that the IRS will never:
1. Ask for your credit or debit card numbers over the phone.
2. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
3. Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
4. Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.
5. Generally, the IRS will first mail you a bill if you owe any taxes.
2. Surge in Email, Phishing and Malware Schemes
According to the IRS itself, there has been a 400% rise in phishing and malware associated issues in this year’s tax season. Specially designed scam e-mails are intended to deceive the taxpayers into believing that the e-mails are officially from the IRS or any other tax regulatory authority.
These malicious phishing e-mails can also contain malignant malware codes as well. They are intended to coerce valuable confidential data from the taxpayers or get them to activate the malicious malware, which can steal all confidential data on its own.
This strategy can also be used with text messages and usually seek out a wide range of information including refunds, filing status, confirming personal information, ordering transcripts, PIN information, and several more.
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3. Tax Refund Scam Artists Posing as Taxpayer Advocacy Panel
The Taxpayer Advocacy Panel or TAP, had complaints in the past regarding illicit e-mails regarding tax refunds to their clients and customers. It is a volunteer group which aids and counsels the IRS on legitimate issues faced by the taxpayers.
However, these emails were nothing but phishing scam emails, trying to delude taxpayers to provide the scammers with valuable personal data like Social Security and PIN numbers or passwords and similar information for credit cards, banks or other financial institutions.
The IRS and TAP have both officially stated to never respond or click on links on such malicious e-mails. They have even asked victims to forward such scam e-mails to firstname.lastname@example.org so that the necessary legal actions can be taken up against scammers.
Tax filing and other tax related tasks and procedures are already quite a hassle, without having to worry about tax scams. But in today’s interconnected world, digital scammers and cyber criminals are always waiting for an opportunity to exploit unwary and unsuspecting victims. However, knowing more about the tactics they employ and the proper channels to follow may help you avoid getting scammed, especially in the busy tax season.