From the Bureau: Protect yourself from tax scams

As tax season ramps up, plenty of scams try to trick people into paying or sharing personal info

Tax scams are often as predictable as taxes themselves; they reappear each tax season with a slightly different spin, but the central theme is scammers posing as the Internal Revenue Service (IRS) trying to trick people into paying up or sharing personal information.

How the scams work

These tax scams may start with a phone call and take several forms. In the one version, the IRS "agent" says there are past due back taxes owed and exerts pressure to immediately pay with a prepaid card, wire transfer, crypto or other payment platform. Failure to comply results in threats of arrest, jail and fines.

In the other version, scammers claim they are issuing tax refunds and ask for personal information to send a refund. This information can later be used for identity theft. Fraudsters also use this approach to target college students by claiming a "federal student tax" has not been paid.

Spotting the scam

Impostors often go to great lengths to appear real. The scammer may give a fake badge number and name. If it’s a phone scam, the Caller ID may show that the call is from Washington, D.C. Con artists sometimes follow up calls with an email that uses the IRS logo, colors, and official-sounding language. Often, these scams start with a serious and official-sounding “robocall” recording.

Scammers typically try to push for immediate action before allowing time to think. The IRS will answer questions about what is owed. Their first contact will always be by mail, not by phone or email. Non-traditional payment methods are requested because they are untraceable and not reversible. The real IRS will not demand instantaneous payment although they may call about outstanding debts after reaching out through the mail.

Another scam to look for is tax identity theft. This occurs when a scammer uses a social security number to fraudulently file a tax return endeavoring to collect a refund. It can also be someone using stolen personally identifying information to get a job. Consumers don’t realize that they have been victims of tax identity theft until they get a written notice from the IRS stating that more than one return was filed or they were paid by an employer they don't know.

Email phishing scams will appear to be from the IRS and include a link to a bogus website intended to mirror the official IRS website. These emails state, “Request to update your IRS e-file immediately.” The emails sometimes mention USA.gov and IRSgov (without a dot between "IRS" and "gov"). Don’t believe it. These emails are not from the IRS.

The IRS also warns of a new mail scam that tricks victims into believing they are owed a tax refund. In this scam, taxpayers receive a fake letter from the “IRS” about an unclaimed refund and asks for personal and financial information that can then be used and sold on the dark web for fraud.

Bobby Hansen is regional director for the Better Business Bureau Cedar Rapids office. Comments: (319) 365-1190; info@dm.bbb.org.