How to avoid tax scams

Image: Flickr user 401(K) 2012

Image: Flickr user 401(K) 2012

Tax season might not be your favorite time of year, but it certainly is for some scammers—they use the confusion of filing taxes to target victims and steal identities and refunds.

The IRS says there are two ways tax scammers might target you:

1. Tax identity theft
This kind of identity theft happens when someone files a fake tax return using your personal information — like your Social Security number — to get a tax refund or a job. You find out about it when you get a letter from the IRS saying:

• more than one tax return was filed in your name, or
• IRS records show wages from an employer you don’t know

2. IRS imposter scams
With this type of crime, scammers aren’t pretending to be you—they’re pretending to be the IRS. It’s really a kind of phishing scam. Scammers call you up saying you owe taxes and threaten dire consequences, including police arrest, if you don’t pay right away. They might know all or part of your Social Security number, and they can rig caller ID to make it look like the call is coming from Washington, DC (even when it’s not). Leaving you no time to think, they demand you make a payment immediately over the phone.

The real IRS won’t ask you to pay with prepaid debit cards or wire transfers, and won’t ask for a credit card number over the phone. When the IRS contacts people about unpaid taxes, they usually do it by mail and not over the phone or email.

For more information about current scams, be sure to check the IRS’ website.

How you can protect yourself

Protect Your Information
To file a fraudulent refund in your name, thieves only need your birthdate and your social security number. Think carefully about where and when you share this information. When possible, have tax forms (like W-2s, 1099s, mortgage interest statements) sent to you electronically. Also, don’t leave your mail sitting in your mailbox—thieves often steal tax forms out of mailboxes at this time of the year.

Get an Identity Protection PIN (when it becomes available)
AllClear ID, a leader in identity protection says: The IRS is launching a pilot program where taxpayers can obtain a personal identification number (PIN) to protect their identities. This special number must be included on all tax documents. Right now the service is only available to those that filed a return from Washington DC, Florida, or Georgia last year or those that were victims of tax ID theft. Get your PIN here if you qualify. (Once you opt in, you can’t opt out.)

Don’t use public Wi-Fi, keep your computer up to date
Always use a secure computer and a secure network to file your taxes. This means you should never use public Wi-Fi. Also, make sure your computer’s antivirus software is up to date and use a firewall. (Note: TDS offers an

For more tips about protecting your refund, check out this article from Time Magazine. You can find more about tax identity theft at ftc.gov/taxidtheft and irs.gov/identitytheft.

If you have a question about your taxes, call the IRS at 800-829-1040 or go to irs.gov. You can report IRS imposter scams to the Treasury Inspector General for Tax Administration (TIGTA) online or at 800-366-4484, and to the FTC at ftc.gov/complaint.

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