Tax Scams/Consumer Alerts
If it sounds too good to be true, it probably is! In recent years, thousands of people have lost millions of dollars and their personal information to tax scams and fake IRS communication. This page looks at the scams affecting individuals, businesses, and tax professionals and what do if you if you spot a tax scam.
REMEMBER: The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. In addition, IRS does not threaten taxpayers with lawsuits, imprisonment or other enforcement action. Being able to recognize these tell-tale signs of a phishing or tax scam could save you from becoming a victim.
National Tax Security Awareness Week
The week (Dec. 5-9, 2016) featured a series of consumer warnings and tips released daily and featured on the Security Summit web page and a one-page Publication 4524, Security Awareness for Taxpayers.
- National Tax Security Week Concludes; IRS, Security Summit Partners Continues Work to Protect Taxpayers in 2017 (IR-2016-166)
- IRS Warns Taxpayers of Numerous Tax Scams Nationwide; Provides Summary of Most Recent Schemes (IR-2016-164)
- Protect Your Clients: Security Summit Partners Warn Tax Pros of Cybercriminals, Launch New Awareness Tips (IR-2016-163)
- IRS, Security Summit Partners Remind Taxpayers to Recognize Phishing Scams (IR-2016-160)
- IRS, Security Summit Partners, Remind Taxpayers to Protect Themselves Online (IR-2016-158).
- IRS and its Security Summit partners announce “National Tax Security Awareness Week.” (IR-2016-156).
Taxes. Security. Together. We all have a role to play in protecting your data
Information for Taxpayers
IRS-Impersonation Telephone Scams
An aggressive and sophisticated phone scam targeting taxpayers, including recent immigrants, has been making the rounds throughout the country. Callers claim to be employees of the IRS, but are not. These con artists can sound convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.
Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Or, victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn’t answered, the scammers often leave an “urgent” callback request.
Note that the IRS will never:
- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
- Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
- Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
- Ask for credit or debit card numbers over the phone.
Remember: Scammers Change Tactics — Aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, but variations of the IRS impersonation scam continue year-round and they tend to peak when scammers find prime opportunities to strike.
Surge in Email, Phishing and Malware Schemes
The IRS saw an approximate 400 percent surge in phishing and malware incidents in the 2016 tax season.
Scam emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. These phishing schemes can ask taxpayers about a wide range of topics. Emails can seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information.
Variations of these scams can be seen via text messages, and the communications are being reported in every section of the country.
When people click on these email links, they are taken to sites designed to imitate an official-looking website, such as IRS.gov. The sites ask for Social Security numbers and other personal information, which could be used to help file false tax returns. The sites also may carry malware, which can infect people’s computers and allow criminals to access your files or track your keystrokes to gain information.
For more details, see:
- IR-2017-03, Security Summit Alert: New Two-Stage E-mail Scheme Targets Tax Professionals
- IR-2016-28, Consumers Warned of New Surge in IRS Email Schemes during 2016 Tax Season; Tax Industry Also Targeted
- IR-2016-15, Phishing Remains on the IRS “Dirty Dozen” List of Tax Scams for the 2016 Filing Season
Email Phishing Scam: “Update your IRS e-file”
The IRS is aware of email phishing scams that appear to be from the IRS and include a link to a bogus web site intended to mirror the official IRS web site. These emails contain the direction “you are to update your IRS e-file immediately.” The emails mention USA.gov and IRSgov (without a dot between “IRS” and “gov”), though notably, not IRS.gov (with a dot). Don’t get scammed. These emails are not from the IRS.
What do you do if you get these messages?
- Do not respond to the email or click on the links.
- Instead, they should forward the scam emails to the IRS at email@example.com.
For more information, visit the IRS’s Report Phishing web page.
Remember, the IRS does not initiate contact with taxpayers by email to request personal or financial information.
Tax Refund Scam Artists Posing as Taxpayer Advocacy Panel
According to the Taxpayer Advocacy Panel (TAP), taxpayers are receiving emails that appear to be from TAP about a tax refund. These emails are a phishing scam, where unsolicited emails which seem to come from legitimate organizations — but are really from scammers — try to trick unsuspecting victims into providing personal and financial information. Do not respond or click the links in them. If you receive an email that appears to be from TAP regarding your personal tax information, please forward it to firstname.lastname@example.org and note that it seems to be a scam email phishing for your information.;
TAP is a volunteer board that advises the IRS on systemic issues affecting taxpayers. It never requests, and does not have access to, any taxpayer’s personal and financial information such as Social Security and PIN numbers or passwords and similar information for credit cards, banks or other financial institutions.
Watch Out for These Recent Tax Scams
IR-2016-123 IRS and its Security Summit partners alert taxpayers to be on guard against fake emails purporting to contain an IRS tax bill related to the Affordable Care Act. Generally, the scam involves an email that includes a fraudulent version of CP2000 notices for tax year 2015 as an attachment.
IR-2016-107 IRS reminds taxpayers against telephone scammers targeting students and parents during the back-to-school season and demanding payments for non-existent taxes, such as the “Federal Student Tax.” If the person does not comply, the scammer becomes aggressive and threatens to report the student to the police to be arrested. As schools around the nation prepare to re-open, it is important for taxpayers to be particularly aware of this scheme going after students and parents.
IR-2016-99 The IRS has seen an increase in “robo-calls” where scammers leave urgent callback requests through the phone telling taxpayers to call back to settle their “tax bill.” These fake calls generally claim to be the last warning before legal action is taken. In the latest trend, IRS impersonators are demanding payments on iTunes and other gift cards. The IRS reminds taxpayers that any request to settle a tax bill by putting money on any form of gift card is a clear indication of a scam.
IR-2016-81 IRS warns taxpayers about bogus phone calls from IRS impersonators demanding payment for a non-existent tax, the “Federal Student Tax.” Scammers try to convince people to wire money immediately to the scammer. If the victim does not fall quickly enough for this fake “federal student tax”, the scammer threatens to report the student to the police.
IR-2016-55 IRS warns taxpayers of a phishing scam targeting Washington D.C., Maryland and Virginia residents where the email scammers are citing tax fraud and trying to trick victims into verifying “the last four digits of their social security number” by clicking on a link provided. As a further attempt to trick residents of the Capital region, the email scam even suggests that information from recent data breaches across the nation may be involved.
IR-2016-40 This variation tries to play off the current tax season. Scammers call saying they have your tax return, and they just need to verify a few details to process your return. The scam tries to get you to give up personal information such as a Social Security number or personal financial information, such as bank numbers or credit cards.
IR-2016-34 Payroll and human resources professionals should be aware of an emerging phishing email scheme that purports to be from company executives and requests personal information on employees. The email contains the actual name of the company chief executive officer. In this scam, the “CEO” sends an email to a company payroll office employee and requests a list of employees and financial and personal information including SSNs.
Don’t fall victim to tax scams. Remember — if it sounds too good to be true, it probably is.
Additional IRS scam-related information:
- IR-2016-89, IRS Warns Consumers of Possible Scams Relating to Orlando Mass Shooting
- IRS Summertime Tax Tip 2016-01, IRS Says be Alert for Tax Scams
- Special Edition Tax Tip 2016-05, Don’t be Fooled; IRS Scams Continue to Pose Serious Threat
- Special Edition Tax Tip 2016-03, IRS Releases Dirty Dozen Scam List: Don’t be a Victim
- Tax Tip 2016-19, Scam Calls and Emails Using IRS as Bait Persist
- IR-2016-14, Phone Scams Continue to be a Serious Threat, Remain on IRS “Dirty Dozen” List of Tax Scams for the 2016 Filing Season
- Special Edition Tax Tip 2015-18, IRS Urges Public to Stay Alert for Scam Phone Calls
- Summertime Tax Tip 2015-18, Don’t Fall for New Tax Scam Tricks by IRS Posers
- IR-2015-114, IRS Warns Consumers of Possible Scams Relating to South Carolina Flood Victim Relief
- IR-2015-99, IRS Warns Taxpayers to Guard Against New Tricks by Scam Artists; Losses Top $20 Million
- IR-2015-26, IRS Completes the Dirty Dozen Tax Scams for 2015
- Tax Tip 2015-20, Stay Vigilant Against Bogus IRS Phone Calls and Emails
- IR-2015-05, Phone Scams Continue to be Serious Threat, Remain on IRS “Dirty Dozen” List of Tax Scams for the 2015 Filing Season
- IR-2014-105, Scam Phone Calls Continue; IRS Unveils New Video to Warn Taxpayers
- Special Edition Tax Tip 2014-18, Five Easy Ways to Spot a Scam Phone Call
- IR-2014-84, Scam Phone Calls Continue; IRS Identifies Five Easy Ways to Spot Suspicious Calls
- IR-2014-81, IRS Repeats Warning about Phone Scams
- Special Edition Tax Tip 2014-17, IRS Updates Phone Scams Warning
- IR-2014-53, IRS Reiterates Warning of Pervasive Telephone Scam
- IR-2014-39, IRS Warns of New Email Phishing Scheme Falsely Claiming to be from the Taxpayer Advocate Service
- IR-2014-16, IRS Releases the “Dirty Dozen” Tax Scams for 2014; Identity Theft, Phone Scams Lead List
- IR-2014-5, Watch Out for Tax Scams as Filing Season Opening Nears
- Special Edition Tax Tip 2014-10, IRS Renews Phone Scam Warning
- Special Edition Tax Tip 2013-13, IRS Warns of Phone Scam
- IR-2013-90, IRS Warns Consumers of Possible Scams Relating to Relief of Typhoon Victims
- IR-2013-84, IRS Warns of Pervasive Telephone Scam
- IR-2013-33, Don’t Fall Prey to the 2013 Dirty Dozen Tax Scams
- IR-2012-23, IRS Releases the Dirty Dozen Tax Scams for 2012
- IR-2011-73, IRS Urges Taxpayers to Avoid Becoming Victims of Tax Scams
- IR-2011-39, Don’t Fall Prey to the 2011 Dirty Dozen Tax Scams
Education is the best way to avoid the pitfalls of these “too good to be true” tax scams. For more information, see:
Information for Tax Professionals
IR-2016-145 IRS Warns Professionals of New e-Services Email Scam
The Internal Revenue Service has issued an urgent alert to tax professionals who use IRS e-services to beware of an email asking them to update their accounts and directing them to a fake website
IR-2016-103, New Phishing Scheme Mimics Software Providers; Targets Tax Professionals
The IRS alert tax professionals to an emerging phishing email scam that pretends to be from tax software providers and tries to trick recipients into clicking on a bogus link. In this email scheme fraudsters use the IRS or other tax issues as a cover to trick people into giving up sensitive information such as passwords, Social Security numbers or credit card numbers or to make unnecessary payments.
IRS Security Awareness Tax Tip 2016-11, Tax Professionals: Monitor Your PTIN for Suspicious Activity
Tax preparers can help protect clients and their businesses from identity theft by checking their PTIN Accounts to ensure the number of returns filed using their identification number matches IRS records. Criminals are increasingly targeting tax professionals, not only to steal client data but also to steal the professionals’ data such as PTINs, EFINs or e-Service passwords. The IRS has teamed up with state tax agencies and the tax industry for a “Protect Your Clients; Protect Yourself” campaign to help increase awareness among tax professionals.
April 15, 2016 – The IRS warned tax professionals of an emerging scam in which cybercriminals obtain remote control of preparers’ computer systems, complete and file client tax returns and redirect refunds to thieves’ accounts.
Tax professionals should review Publication 4557, Safeguarding Taxpayer Data, A Guide for Your Business, which provides a checklist to help safeguard taxpayer information and enhance office security.
IR-2015-31 – The IRS warns tax preparers to watch out for a bogus email asking tax professionals to update their IRS e-services portal information and Electronic Filing Identification Numbers (EFINs). The links that are provided in the bogus email to access IRS e-services appear to be a phishing scheme designed to capture your username and password. This email was not generated by the IRS e-services program. Disregard this email and do not click on the links provided.
No matter how some things are sliced, they’re still baloney. If someone tells you that you don’t have to pay taxes, check out The Truth About Frivolous Tax Arguments. This IRS.gov exclusive addresses some of the more common false legal arguments made by those opposed to compliance with the federal tax laws. Each contention is briefly explained, followed by a discussion of the legal authority that rejects the contention. The second section deals with frivolous arguments encountered in collection due process cases. The final section illustrates penalties imposed on those pursuing frivolous cases.
- IR-2014-51, IRS Debunks Frivolous Tax Arguments, includes numerous recently decided cases that demonstrate that the courts continue to regard such arguments as illegitimate.
- IR-2011-23, IRS Debunks Frivolous Tax Arguments, highlights the issue and possible penalties.
- IR-2004-41 describes the increasingly strong penalties the courts have imposed from March 2003 to March 2004 on taxpayers who pursued frivolous cases to delay IRS collection actions.
- IR-2003-28 details penalties the Tax Court imposed from April 2001 until early March 2003 for making frivolous Collection Due Process arguments.
Identity Theft Scams
The IRS has issued several consumer warnings about the fraudulent use of the IRS name or logo by scammers
trying to gain access to consumers’ financial information in order to steal their identity and assets. Scammers will use the regular mail, telephone, fax or email to set up their victims. When identity theft takes place over the Internet (email), it is called phishing.
The IRS does not initiate taxpayer communications through email. Unsolicited email claiming to be from the IRS, or from an IRS-related component such as EFTPS, should be reported to the IRS at email@example.com.
Additionally, clicking on attachments to or links within an unsolicited email claiming to come from the IRS may download a malicious computer virus onto your computer.
Taxes. Security. Together Learn more about how the IRS, representatives of the software industry, tax preparation firms, payroll and tax financial product processors and state tax administrators are working together to combat identity theft and refund fraud.
Learn how to protect your personal information.
Reporting Tax-Related Schemes, Scams, Identity Theft and Fraud
To report the various types of tax-related illegal activities, refer to our chart explaining the types of activity and the appropriate forms or other methods to use.
You may also report instances of IRS-related phishing attempts and fraud to the Treasury Inspector General for Tax Administration at 1-800-366-4484.