Tax Scams to Watch Out For in 2016

Created 3 years 137 days ago
by Roger Haskins

Views: 23070

tax scams

It’s tax season, which means it’s also tax “scam” season. We’ve done the research to uncover some of the most popular scams out there right now and provide action steps in case you suspect someone is trying to pull one over on you.

1. IRS Phone Scam

This one has really become popular among criminals in the last few years. Here is what happens:

  • You will receive a call from someone saying they are an agent at the IRS.
  • In an aggressive and intimidating manner they inform you that there was an error in your past taxes or that you have failed to pay past due taxes.
  • These callers will threaten that if the money isn’t paid immediately, you will be arrested, have your driver’s license revoked, or for some be deported.
  • Their goal is to keep you on the phone and prompt you to purchase prepaid credit cards which will electronically transfer the money to pay off the fictitious debt.

The Truth: The IRS, The Treasury, the Federal Bank, or whomever else they pretend to be, does not make harassing phone calls to secure any back due taxes. Nor do they ever require payment in prepaid cards over the phone. While they may seem intimidating, your best option is to hang up. If you have concerns or questions, you can call the IRS at 800-829-1040 to verify any claims.  

2. Identity Theft Scam

For most people that fall victim to this scam, they don’t realize it until after it has already happened:

  • You submit your tax return and find that it is rejected because a tax return was already submitted under your social security number.
  • The issue is reported to the IRS.
  • The burden falls on you, the taxpayer, to prove your identity.

The Truth: The IRS has practices in place to help detect some of this by setting alerts if someone files with your name and SSN, but does it from a different address or with a different employer. Protecting yourself from this scam means being careful with your personal identifying information all year long so it doesn’t fall into the wrong hands. The other way to stay ahead of these crooks is to file early and beat them to the punch.

3. IRS Phishing Scam

Phishing is when a criminal sends out emails to lure unassuming people into providing valuable information they would normally protect. In this scenario

  • You may receive an email, text, or social media message that looks very official and seems to be labeled with all the appropriate IRS logos and language.
  • The message may ask you to confirm some of the information you supplied on your tax return or offer to let you check the status of your tax return by simply entering your SSN or other personal information.
  • Just clicking on the link could leave you susceptible to downloading tracking malware on your computer.

The Truth: The IRS does not solicit personal information through social media, text, or email. Do not click on suspicious links in emails or social media posts. If you are unsure, you can call the IRS directly at 800-829-1040 or go online to and manually navigate to the page referenced in the link.

If you suspect someone is trying to scam you or someone you know, please report it promptly to the IRS Tax Fraud Hotline at 800-829-0433 or refer to the IRS website for information on reporting these, as well as other less common types of tax fraud activity.