IRS Tax Scams Phishing: Common Tactics and Prevention Methods

IRS tax scams are on the rise, with scammers using phishing tactics to steal sensitive information from unsuspecting taxpayers.

Scammers often pose as IRS agents, claiming you owe back taxes or owe a refund. They may even threaten to arrest you if you don't pay up.

In reality, the IRS will never contact you via email or phone to request sensitive information.

The IRS will typically send a letter or notice by mail if there's an issue with your tax return.

The IRS is taking steps to protect taxpayers from scams and phishing. Know how the IRS contacts you to protect yourself from impersonators.

Phishing and spearphishing are real threats, especially for tax professionals. These scams involve fake communications posing as legitimate organizations, including the IRS and states, to lure victims into providing valuable personal and financial information.

Tax professionals need to be very careful about spearphishing because of the risk of a data breach. A successful spearphishing attack can steal client data and the tax preparer's identity.

See what others are reading: Spearphishing vs Phishing

Employee Retention Credit scams are also on the rise. Unscrupulous promoters are misrepresenting eligibility rules to lure businesses into claiming the credit when they don't qualify.

The IRS is highlighting seven suspicious signs and urging businesses to seek a trusted tax professional to resolve an incorrect claim if they need to.

Scammers may email a tax professional to ask for help with their taxes, with a malicious link or attachment claiming to be their tax information. This can give the scammer access to the preparer's email address, password, and other information.

If you're a tax professional and you've been victimized, report the data breach to the local IRS Stakeholder Liaison representative immediately. This will notify IRS Criminal Investigation and others within the agency.

You can also report fraud incidents to the local offices of the Federal Bureau of Investigation and Secret Service, and to your local police.

Here are some resources to help you report a data breach:

Employee Retention Credit scams are a real concern, and the IRS has highlighted seven suspicious signs to watch out for. These signs include misrepresenting eligibility rules, which can lead to incorrect claims.

The IRS reminds businesses to quickly pursue the claim withdrawal process if they need to ask not to process an ERC claim for any tax period that hasn't been paid yet. This is crucial to avoid any potential issues.

Phishing emails are a common tactic used by scammers, and they often claim to be from the IRS. These emails may contain malicious links or attachments that can compromise your email address, password, and other sensitive information.

The IRS has a special "report a data breach" web page that tax professionals can use to get state guidance on reporting scam victims. This is a great resource for those who have been targeted by scammers.

Be on the lookout for phishing and social engineering scams via unsolicited emails, phone calls, or text messages. Cybercriminals may claim to be from the IRS or even the Biden administration, trying to trick you into revealing your social security number.

Take a look at this: Social Security Administration Email Scam

Here are some key resources to report data breaches:

Don't be fooled by scammers who claim to be from the IRS. They won't initiate contact with taxpayers by email, text message, or social media channels.

Social media can circulate inaccurate or misleading tax information, which can lead to fraudulent form filing and bad advice. Taxpayers should always be cautious and remember that if something sounds too good to be true, it probably is.

The IRS has seen schemes that encourage people to submit false, inaccurate information in hopes of getting a refund or taking advantage of a credit, such as the Employee Retention Credit. This can put their money and information at risk.

Taxpayers can follow the IRS on X (formerly Twitter) with @IRStaxsecurity for help avoiding common scams.

Phishing and data breaches are serious concerns for taxpayers and tax professionals. Phishing attempts often arrive as unsolicited emails or texts, trying to trick victims into sharing valuable information.

Spearphishing is a targeted phishing attempt, specifically designed to deceive a particular organization or business. Tax professionals are at high risk of falling victim to spearphishing, which can lead to a data breach.

A successful spearphishing attack can result in stolen client data and the tax preparer's identity being compromised. This allows scammers to file fraudulent returns.

Tax professionals who are victims of a data breach should immediately report the incident to the local IRS Stakeholder Liaison representative. This notification will alert IRS Criminal Investigation and other relevant parties.

Tax professionals should also report fraud incidents to the local offices of the Federal Bureau of Investigation and Secret Service, as well as their local police.

To stay safe from IRS tax scams and phishing, it's essential to have a written security plan in place. This plan should include who to contact in case of a data breach, as required by the Federal Trade Commission.

You can quickly develop a Written Information Security Plan using a special document created by the Tax Professional team as part of the Security Summit effort. This document will help you create an effective action plan to respond to a data breach.

To protect yourself from impersonators, know how the IRS contacts you. The IRS will never contact you via email, phone call, or text message requesting personal information. If you receive a suspicious message, don't reply.

Here are some tips to protect yourself during tax preparation season:

The IRS will never contact you out of the blue to ask for sensitive information or payment over the phone. This is a common tactic used by impersonators to scam people.

To protect yourself, know how the IRS contacts you. They usually initiate contact through the mail, and the letter will have your name and address on it.

Be wary of calls that demand payment or threaten you with arrest. The IRS will never call you and ask for money.

Having a security plan in place is crucial to responding to a data breach. Under Federal Trade Commission rules, tax professionals must have a Written Information Security Plan.

If you're a tax professional, you're required to have this plan, but it's also a good idea for individuals to have a plan in place. This will help you know who to contact and what steps to take in case of a breach.

To develop a Written Information Security Plan, you can use a special document created by the Tax Professional team as part of the Security Summit effort. This document will help you quickly develop a plan.

Here are some key elements to include in your plan:

By having a security plan in place, you'll be better equipped to respond to a data breach and protect your sensitive information.