The first quarter of the year can be stressful for many, especially with tax season just around the corner. Filling for taxes can be confusing and intimidating for people, and scammers leverage these feelings to seal from us. The IRS, in its annual report, identified 5.5 billion dollars in tax fraud in 2022. In 2023, the IRS received nearly 300,000 reports of identity theft, with only a little over 150,000 of those reports being closed. With how much money is lost to fraud every year, how can we identify these scams before it's too late? We are going to go over various approaches scammers take to steal from people and tips to help yourself and others before you get scammed.
Summary
- Be cautious with any digital communication. Tax agencies communicate via traditional mail
- Unsolicited messages referencing large dollar amounts, either returns or owed, are a warning sign
- For Oregon residents, the 2024 "kicker" is one of the largest in history. You don't need to take any extra steps to benefit. Your "kicker" will already be included in your tax return
- Never share information with someone you don't know. If you're worried about what someone is saying, ask for a case number or some way to identify the issue. Find a contact number for the agency on your own and call using the number you find. If a person won't willingly get off the phone with you, hang up and don't continue the conversation
What Is A Tax Scam
Tax scams can present themselves in various ways. They are usually from some entity claiming to be the IRS contacting you about you owing or being owed money. It could look like an email telling you to sign up for a COVID-era tax credit that you aren't actually eligible for or asking you to contact them about an error in your return. The IRS has published the worst tax scams during the year in their campaign, The Dirty Dozen, since 2014. This is where you can find the most common tax scams of recent years.
In 2023, the most common tax scams were:
- Phishing and Smishing (SMS phishing)
- Online account help from third-party scammers
- Social media misinformation
How Do I Identify A Tax Scam
The scams above are common in everyday scams, so there will be some crossover with how to identify them. Here are some unique aspects to tax scams:
- Claims of being affiliated with the government, and specifically the IRS. The IRS will never initiate contact with you via email or SMS, only with correspondence through the USPS.
- Does the message say you have a large return coming your way if you fill out forms?
- Or, does the message say you owe a large amount, and need to fill in information for an online payment?
- Some scammers claim you will be arrested or have your license suspended
- Fear and authority are tactics used against vulnerable people
- Is the person using their authority to pressure you into doing an action?
- Do you feel uncertain, or even scared, that you are doing something wrong?
Some common characteristics from other scams that are seen in tax scams as well are:
- If it seems too good to be true, it probably is
- Asking for payment via gift cards or prepaid cards
How Can I Better Protect Myself Against Tax Scams
There are many ways to protect yourself against any kind of scam, but here are some tips specifically for tax scams:
- When getting an unprompted message from someone claiming to be with the IRS
- Do not reply to the message
- Do not open any attachments or links in the message
- Read up on why the IRS might legitimately initiate contact with you
- When reading a notice from someone claiming to be with the IRS
- Verify the notice on the IRS website
- Only go through the official avenues of communication with the IRS when replying. Official communication channels can be found at IRS.gov
- When encountering a tax scam
- Follow the IRS's guidelines in reporting different types of tax scams
- Report it to the US Treasury Inspector General for Tax Administration
- Forward emails claiming to be the IRS to phishing@irs.gov (and as always, don't open attachments or links included in the email before sending it to the IRS)
How Can I Tell If I Have Been Scammed
It is important to stay vigilant in your awareness of these scams, but also know what to look out for if you are scammed. These are some signs of your identity being stolen and some ways to respond:
- You tried to file your taxes electronically and it says a return was already filed under your Social Security number
- You will need to send in Form 14039 with your paper return to initiate the reporting of fraud (guidelines are linked below)
- You received a 1099 or a W-2 that you don't recognize
- This could be an error. If this was done in error, the company issuing the form can resend them to the correct party. You may have to contact the company to inform them of the error.
- If it was not done in error, contact the IRS Identity Theft Unit.
- You receive a 5071C notice, which is to verify your identity after your tax return has been filed so the IRS can process it.
- If you haven't filed your tax return yet, use the IRS identity verification and report that you haven't yet filed your taxes.
- You do not have to fill out Form 14039 if you have received a 5071C notice.
- Follow IRS guidelines in reporting identity theft.
- If you have filed your return, you must re-file your return along with the 5071C notice.
What Do I Do If I Have Already Been Scammed
If you have been scammed or your suspect that you have been, the first step is to report the scam, as noted above. Then, follow these steps:
- File a police report
- Follow the IRS's official guidelines on how to report tax related identity theft
- Report the identity theft to the Federal Trade Commission
- Call the three major credit reporting agencies and request fraud alerts and a credit freeze
- Monitor credit reports and account statements
- Gen an Identity Protection PIN from the IRS
While we always want to prevent people from getting scammed, we must support those who have been scammed. It can take, on average, over a year and a half to recover fully from having your identity stolen. With the resources provided, we bring the community awareness on how to identify, act, and recover from these scams. We at the Information Security team hope everyone has a smooth process during this tax season.
If you receive anything that looks suspicious at your pdx.edu email account, don't hesitate to forward the message to abuse@pdx.edu for review.