How to recognize IRS tax scams and how to know if its really the IRS?

Each year, fraudsters trick thousands of US taxpayers and steal millions of dollars with fakes issued by the Internal Revenue Service. The clones mainly involve the IRS due to their authoritative nature and have been used by fraudsters to take advantage of taxpayers’ ignorance by either asking for personal details or money.

Due to the increase in IRS tax scams, it is important for taxpayers to be informed and more so during the onset of taxes. Just like in any form of crime, the first step in protection is to identify the warning signs and secondly learn how the IRS really works.

Did you know: The New Year saw crimes such as tax scams remain a prominent fraud type that had fraudsters stealing millions from people.

This guide will help you to:

• Explain various IRS scams.
• Read about how to check if a legitimate communication is from the Internal Revenue Service.
• Learn the steps required to not be a target of Internal Revenue Service scams and, in the event it happens, what to do.

Common Types of IRS Scams

Scammers use a variety of tactics to impersonate the IRS and trick taxpayers. Below are the most common types of IRS tax scams and how they operate.

1. IRS Phone Scams (Impersonation Calls)

Another popular one is the telephone IRS, which is a trail of individuals posing to be from the Internal Revenue Service.

• How It Works: These fraudsters use the phone to reach the taxpayers and tell them that they have to pay back taxes to the IRS. Such officers tend to employ coercive behavior, including threats to arrest, deport, or suspend the license of the victim.

2. IRS Email Scams (Phishing Emails)

Cybercriminals send fake emails in the belief that they are from the IRS with the aim of gaining personal or financial details.

• How It Works: These emails often include fake IRS logos, urgent messaging, and malicious links directing users to phishing websites.

3. IRS Scams Mail (Fake IRS Letters)

Some scammers send fraudulent letters that mimic official IRS correspondence to deceive taxpayers.

• How It Works: Fake IRS letters often demand immediate payment or personal details under the pretext of unpaid taxes. These letters usually contain errors in formatting or fake IRS logos.

4. IRS Tax Refund Scams

Scammers promise people higher tax refunds for tricks to demanding personal or bank details.

• How It Works: The victims are lead to web pages where their details are stolen or they fall prey to paying "filed fees" for refunds they do not have.

5. IRS Tax Return Scams (Identity Theft)

Identity thieves use stolen Social Security numbers to file fraudulent tax returns and claim refunds.

• How It Works: Victims only typically find the scheme when filing a legitimate return, as the service already has accepted an early false one under your name.

6. IRS Impersonation Scams (Fake IRS Investigations)

Fraudsters pose as agents of the Internal Revenue Service when they're making a pretextual call purported to be concerning fraudulent activity and potential discrepancies about their tax accounts.

• How It Works: It takes the unsuspecting victim to ask sensitive questions about what they need to "clear out the problem.

7. Social Security Number (SSN) Scams

Scammers claim there is an issue with your Social Security Number related to your taxes.

• How It Works: Victims are told their SSN will be “suspended” unless they verify their number or pay outstanding taxes.

8. Gift Card and Cryptocurrency Payment Scams

Scammers demand tax payments using unconventional methods like gift cards, cryptocurrency, or wire transfers.

• How It Works: Fraudsters claim these payment methods are the only way to avoid legal penalties.

9. IRS Report Fraud Scams

The criminals pose as investigators and say there’s a tax fraud case involving the victim and ask for his/her personal or financial details to “fix it.”.

• How It Works: Individuals click on these links unknowingly and you are rushed to provide information such as banking or credit card details.

How to Recognize IRS Tax Scams?

Identifying an IRS tax scam can save you from falling victim to fraud. Scammers target taxpayers by impersonating the IRS through phone calls, emails, or even physical mail. Here’s how you can recognize these scams and protect yourself by checking these red flags:

1. High-Pressure Tactics

• Scammers often use fear and urgency to intimidate victims. They may threaten:
  • Arrest, deportation, or suspension of your driver’s license
  • Legal action if immediate payment isn’t made
• These tactics are common in IRS tax return scams where fraudsters claim you owe back taxes.

2. Unusual Payment Requests

• The IRS never requests payment through unconventional methods like:
  • Gift cards
  • Cryptocurrency
  • Wire transfers
• If you’re asked to pay taxes through any of these methods, it’s a clear sign of an IRS tax refund scam.

3. Fake Caller ID

• Scammers use caller ID spoofing to display "IRS" or a government number, making it look legitimate.
• Always verify by contacting the IRS directly at their helpline: 1-800-829-1040.

4. Fraudulent IRS Emails or Text Messages

• IRS email scams are becoming increasingly common. Watch out for the following red flags:
  • Emails or texts claiming to be from the IRS, often labeled as "urgent" or "action required."
  • IRS fraud emails asking you to click on links to update personal or banking information.
  • Emails containing grammar errors, fake IRS logos, or suspicious links.

5. Suspicious IRS Mail

• Although the IRS primarily uses physical mail for official communication, scammers also send fraudulent IRS scam mail.
• Fake letters often have poor formatting, incorrect information, or fake IRS seals.
• Always verify by contacting the IRS directly or using their online tools to check your account status.

6. Unsolicited Refunds or Overpayment Claims

• Others will telephone or fax unsolicited messages telling the listener that they are due a refund or have overpaid their taxes.
• The IRS tax refund scams are not actually to help you get a refund from the government but to con you into giving your personal details.
• To check program such claims, do it directly on the IRS website or if you already logged into your IRS online account.

How the IRS Really Communicates?

Understanding how the IRS operates can help you avoid falling victim to IRS scammers. Here’s what you need to know:

1. No Initial Phone Calls

• The IRS never starts with phone calls demanding payment or threatening legal action.
• If you receive IRS scam phone calls or a threatening IRS telephone scam, it’s fraudulent.

2. No Immediate Threats or Unconventional Payments

• The IRS does not threaten arrest or demand payments via gift cards, cryptocurrency, or wire transfers.
• Such demands indicate an IRS telephone scam.

3. Official IRS Letters Only

• The IRS primarily communicates through official letters via U.S. mail.
• Verify any suspicious mail to avoid falling for an IRS letter scam.

4. Secure Online Portals and No Personal Info Requests

• The IRS uses secure portals for taxpayer communication.
• The IRS will never ask for personal details like Social Security numbers via email or text. Any such request likely comes from IRS scammers.

Examples of IRS Scams

How to Avoid IRS Scams?

Protecting yourself from IRS scams requires vigilance and an understanding of how scammers operate. Whether it’s a fraudulent IRS email, IRS scam mail, or other deceptive tactics, the following steps will help safeguard your personal and financial information.

Steps to Take to prevent and protect yourself from IRS Scams:

1. Verify IRS Communication

   • Any IRS contact should be verified by calling the IRS through the official website or the hotline service.
   • If you get an email from the IRS about fraud, you don’t reply to the message or click on the link. To confirm this information, go to www.IRS.gov and sign in to your online account or call the IRS at 1-800-829-1040.

2. Ignore Unsolicited Emails or Texts

   • The IRS will never call, email, or even text you, asking for personal details such as bank account numbers.
   • Do not respond to messages from individuals asking to be from the IRS since most of the time they have been proven to be fake emails or the carrying of an IRS Email Scam.

3. Check the Authenticity of IRS Mail

   • It is recommended you scrutinize any letter or mail with an IRS notation closely. Avoid copy services that use poor formatting of the document, spelling mistakes, or imitations of the IRS logo.
   • IRS scam mail frequently threatens that immediate payment should be made or that it uses untraditional modes of receiving payment like gift cards and bitcoin, which the body does not use.

4. Do Not Click on Suspicious Links

   • In most IRS fraud emails, the scammers provide links to websites that have intentions of taking your identity data or installing a virus on your computer.
   • If an email or message leads you to a website, then you can be sure that it is not the official website of the IRS You should make sure that you type the website address of the IRS directly as IRS.gov.

5. Monitor Your Tax Records

   • Lodge yourself on the IRS portal and always review the account to see if any changes have been made.
   • The following tips are important and especially vital during this season since there is always a common increase in IRS scams and fraud.

Conclusion

Scammers impersonating the IRS continue to target unsuspecting taxpayers, making it essential to stay vigilant and informed. By understanding the red flags of IRS tax scams, such as threatening calls, phishing emails, or fake IRS mail, you can protect yourself from falling victim to these schemes.

If you’ve been affected by Internal Revenue Service fraud or need assistance recovering from an IRS tax scam, visit Global Financial Recovery. Their expert team specializes in helping victims of tax fraud and can guide you through the recovery process.