Twelve of the Most Common Tax Scams

Date01 July 2016
Published date01 July 2016
AuthorCaroline D. Strobel
DOIhttp://doi.org/10.1002/jcaf.22185
83
© 2016 Wiley Periodicals, Inc.
Published online in Wiley Online Library (wileyonlinelibrary.com).
DOI 10.1002/jcaf.22185
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Twelve of the Most Common Tax Scams
Caroline D. Strobel
The IRS recently released 12
current tax scams that unwary
individuals may mistakenly fall
into. While they happen most
frequently during tax season,
they can be encountered any-
time during the year. Keeping
these in mind should help indi-
viduals keep from falling into
these traps.
1. The number one scam this
year is tax-related identity
theft, which is dened by
the IRS as someone using
a taxpayer’s stolen Social
Security number to le a
tax return in order to claim
a fraudulent refund. While
the IRS has introduced
more effective screening and
detection systems that are
designed to detect identity
fraud before it issues anyone
a refund, it is still a major
problem. Over the past year,
the IRS has participated in a
Security Summit initiative in
partnership with the states
and the tax preparation
industry to try to provide
more security for taxpay-
ers. More than 20 data ele-
ments are used to try to stop
fraud. This is one reason
that refunds will take longer
to receive this year. Taxpay-
ers need to be alert to the
possibility of a data breach
and safeguard their personal
information.
2. The second most common
scam this year is phone
scams, in which criminals
call, impersonating the
IRS. Many times, they dis-
guise the number they are
calling from so it appears
to be the IRS or another
agency calling, and they may
threaten arrest, deportation,
or license revocation. The
scammers sometimes use
IRS titles and fake badge
numbers to appear legiti-
mate and use the victim’s
name, address, and other
personal information, which
makes the call sound ofcial.
To protect themselves, the
IRS says, taxpayers should
be aware the IRS will never
call to demand immediate
payment, call about taxes
owed without rst having
mailed a bill, call to demand
payment without the oppor-
tunity to question or appeal,
require use of a specic
payment method, such as a
prepaid debit card or wire
transfer, ask for credit or
debit card numbers over
the phone, or threaten to
bring in local police or other
law enforcement to arrest
a taxpayer for not paying.
Remember, you will always
receive a written notication
from the IRS with contact
information. It is up to you
to contact the IRS, not the
IRS calling you to tell you
that they are demanding
immediate payment of
additional taxes.
3. “Phishing” continues to be
a major problem for unwary
taxpayers. This occurs when
taxpayers receive unsolicited
e-mails seeking nancial or
personal information. If you
receive a suspicious e-mail
you should send it to phish-
ing@irs.gov. The IRS will
not send you an e-mail out
of the blue that concerns a
bill or refund. In addition,
these e-mails can also infect
a computer with malware
without the taxpayer know-
ing it, often enabling the
criminals to access sensi-
tive les or track keyboard
strokes, exposing login infor-
mation. If you receive an
e-mail that appears to come
from the IRS, don’t open it,
and delete it immediately. I
warn my clients and friends
not to bank by mail or keep
their nancial information
on their computer so that
it can easily be accessed by

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