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Although the first IRS tax filing deadline has passed (April 18), tax scamsters will continue their swindles to ensnare taxpayers.
The pitch for every tax scam is the same: “We will help you avoid paying the IRS.” While there are hundreds of legitimate ways to reduce your federal income tax bill, fraud merchants purloin millions through what the IRS calls its “Dirty Dozen.” Most of the swindles involve bogus tax breaks. Here are summaries of the top five scams targeted to individuals:
Phishing and Smishing. These fake communications from those posing as legitimate organizations in the tax and financial community, including the IRS and the states. These messages arrive in the form of an unsolicited text (smishing) or email (phishing) to lure unsuspecting victims to provide valuable personal and financial information that can lead to identity theft.
Third-Party IRS “Help.” Swindlers pose as a “helpful” third party and offer to help create a taxpayer’s IRS Online Account at IRS.gov. In reality, no help is needed. But third parties making these offers will try to steal a taxpayer’s personal information this way. Taxpayers can and should establish their own online account through IRS.gov.
Bogus Charities. Scammers set up these fake organizations to take advantage of the public’s generosity. They seek money and personal information, which can be used to further exploit victims through identity theft.
Social Media Fraudulent Form Filing. Social media can circulate inaccurate or misleading tax information, and the IRS has recently seen several examples. These schemes encourage people to submit false, inaccurate information in hopes of getting a refund.
Offers in Compromise Mills. Offers in Compromise are an important program to help people who can’t pay to settle their federal tax debts. But “mills” can aggressively promote Offers in Compromise in misleading ways to people who clearly don’t meet the qualifications, frequently costing taxpayers thousands of dollars. A taxpayer can check their eligibility for free using the IRS Offer in Compromise Pre-Qualifier tool.
“Scammers are coming up with new ways all the time to try to steal information from taxpayers,” said IRS Commissioner Danny Werfel.
“People should be wary and avoid sharing sensitive personal data over the phone, email or social media to avoid getting caught up in these scams. And people should always remember to be wary if a tax deal sounds too good to be true.”