Tax scams are a year-round phenomenon, but can be more common during the summer. Most people have recently filed their tax return, so it's a logical time to try to "verify" a taxpayer's information or to claim that a miscalculation has resulted in additional tax liability.
Fortunately, the vast majority of tax scams are 100% avoidable if you know what to look for. With that in mind, the IRS recently issued a newsletter with five telltale signs of tax scams that all American taxpayers should know.
There are many different variations of tax scams, and they are constantly evolving. Having said that, there are some common scams that are seen over and over again.
One common scam involves trying to get taxpayers to "verify" sensitive information from their tax return, like their Social Security number or bank account information. A tax return contains virtually all the information an identity thief would need, so it's no wonder that it's a common target.
Another scam involves telling taxpayers that they owe additional tax that must be paid right away. The scammer may claim that there was a miscalculation on the return, or some back taxes are owed for whatever reason. This scam often involves a certain method of payment, such as sending the funds on a prepaid debit card.
There are many other scams, and there are many variations of each individual scam. Fortunately, by knowing what to look for, you can avoid most of them.
In order to avoid most tax scams, it's important to know these five things the IRS will never do. Specifically, the IRS will never:
If the individual or organization you're dealing with does any of these things, you can be pretty certain that you're being scammed. It's also worth noting that legitimate IRS websites begin with www.irs.gov, while scams often use variations of this, such as irsgov.com.
© Echo/Getty Images Concerned woman holding bills and talking on cell phone
Obviously, if you see any signs of a scam, you should hang up the phone or ignore the email or text you received. Don't give out any personal information.
You can report scam emails at phishing@irs.gov, and you can report any scam (phone, email, or otherwise) to the Treasury Inspector General for Tax Administration as well as the Federal Trade Commission.
If you think the call or email might be legitimate, you're still better off calling the IRS directly or logging into irs.gov to view your actual tax information. This way, you'll be 100% certain that you're dealing with the correct authorities.