Do Not Fall For These Common Tricks Used By Tax Scammers

The IRS is a common target for scammers looking to exploit unsuspecting taxpayers. They have all sorts of schemes up their sleeves, from sophisticated phishing to fraudulent tax credits; these tricks can threaten your financial security and personal information. Understanding the tactics used by fraudsters is crucial to protecting yourself. This article, highlighted from ManagedPAY, explores 15 IRS fraudulent schemes you should know, detailing how each operates.

Phishing 

This kind of scam involves phony emails, websites, or text messages that appear legitimate. They aim to trick you into providing private details like bank account details or Social Security numbers. These messages often claim to be from the IRS before they demand immediate action or provide false refunds.

Fake Charities 

Scammers exploit charitable intentions by creating hoax charities that claim to help disaster victims or other causes. They may solicit donations and promise tax deductions, but these organizations are not legitimate and are designed to steal your money.

Threatening Phone Calls 

Fraudulent callers impersonate IRS agents, using threats of arrest, deportation, or license revocation to scare people into paying nonexistent tax debts. The IRS only initiates contact over the phone for tax issues after mailing a bill.

Economic Impact Payment Theft 

During economic relief, swindlers target stimulus payments, falsely claiming to help expedite or increase the amount of funds received. They may request personal information or payment to process these benefits.

Employee Retention Credit Claims 

Scammers may offer to file false claims for employee retention credits on behalf of businesses, promising inflated refunds. Unsuspecting people may unknowingly become involved in fraudulent tax activities, sometimes leading to unwarranted penalties and legal consequences.

False Fuel Tax Credit Claims 

Promoters falsely advertise fuel tax credits for individuals or businesses not eligible to claim them. These schemes involve complex paperwork or exaggerated refund amounts, exploiting tax laws for financial gain.

Offer in Compromise Scam 

Fraudsters promise to settle tax debts for significantly less than what is owed through the IRS Offer in Compromise program. They charge high fees upfront but fail to deliver on negotiations, heartlessly leaving victims with unresolved tax liabilities.

Social Media Scams 

Swindlers use social media platforms to impersonate IRS officials or create counterfeit profiles offering tax services or refunds. They lure people with promises of quick refunds or tax relief and then steal personal information immediately.

Unemployment Fraud 

With unemployment benefits rising during economic downturns, defrauders file false claims using stolen identities to collect benefits. The targeted party may only realize they are implicated once they attempt to file legitimate claims.

Refund Theft 

Scammers steal taxpayer identities to file fraudulent tax returns and claim refunds. Victims often discover Fraud when their legitimate tax return is declined due to a duplicate filing under their Social Security number.

Senior Fraud 

Elderly individuals are targeted with cons tailored to exploit their trust or lack of familiarity with technology. These scams may involve offers of fake tax relief or threats of penalties, preying on vulnerability.

Ransomware 

Cybercriminals use ransomware attacks to block access to taxpayer data or computer systems, demanding payment in exchange for restoring access. Such attacks often disrupt businesses or compromise personal information.

Tax Debt Resolution Companies 

Some companies promise to negotiate with the IRS on your behalf to resolve tax debts for a fee. However, many companies use deceptive practices like charging high fees without delivering the promised results.

Fake Payments with Repayment Demands 

These chiselers send people fraudulent checks or electronic payments, claiming they have overpaid taxes and demanding repayment. Victims unwittingly return money to sharks, only to find out later that the initial payment was a sham.

Scams Targeting Non-English Speakers

Scammers exploit language barriers to deceive non-English speakers with threats or false promises related to tax issues. These shakedowns may involve misleading information or demands for immediate payment, exploiting cultural trust or fear.