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It’s that time of year again. Americans across the country are gearing up to submit their tax returns. While tax season may not seem as exciting or frenzied as the winter holiday shopping rush, it does present a distinct brand of chaos on its own.

Gathering forms, performing calculations, double-checking for accuracy, meeting deadlines, and requesting extensions…yes, tax season can get pretty hectic no matter how much money anybody makes.

Tax season is the perfect nesting ground for fraudsters. The bureaucratic hustle and bustle defining this time of year allows scammers to take advantage of hardworking taxpayers like you.

To prevent becoming a victim of tax scams, it’s important to recognize scammers and remove yourself from a vulnerable situation. Here’s what you can do to protect yourself during tax season.

The Goal of Tax Scammers

Why are tax scams so prevalent? Filing taxes involves using items that thieves find valuable, including:

• Money
• Personal Information: Social Security Numbers, addresses
• Financial Information: bank account numbers, payment information
• Account Information: passwords, vectors for malware
  

Information is a treasure trove to scammers. They can use it to impersonate others, commit more fraud, and sell that information on underground markets, leaving their victims more susceptible to fraud, theft, and cybercrime.

Protecting your personal and financial information is a multi-front effort. You’ll have to be able to spot tax-related scams across many channels, including:

• Phone calls or “pop-up” consultations
• Text and direct messaging
• Physical mail
• Suspicious websites and e-mail
  

In this article, we’ll cover two types of imposter scams that are common during tax season. Remember that tax scams can happen all year and not just through April.

Keep an Eye Out for IRS Imposters

One of the most common ways scammers defraud taxpayers is by impersonating authority figures. They do this by claiming to be from law enforcement or an agent from the federal government, like the Internal Revenue Service.

According to an article in NPR, a common way for IRS imposters to pitch a scam is to try and intimidate their victims:

• First, they try to send a message via text, phone call, or email.

   

• Then, the message may claim that the recipient is subject to an undesirable situation, like an investigation, an arrest, or revocation of a driver’s license.

   

• Finally, the imposter may demand a target’s personal information or some form of payment to avoid a bad outcome.
  

You can avoid IRS imposters by recognizing common tells. IRS agents will never initially contact a taxpayer by email, text, or phone. The IRS only uses the United States Postal Service (USPS) to deliver communications to taxpayers. Only after several ignored letters would an IRS agent call you.

You can dismiss an IRS imposter if:

• They are threatening you with an arrest.
• They demand that you make a payment on the spot.
• They ask for personal or financial information.
• They request that you click on a link or download a file.
  

Knowing how the IRS contacts people can help you to rule out most fraud attempts. You can report tax-related imposter scams to the IRS or the FTC.

Make Sure Your Tax Preparer Is Qualified for the Job

Hiring a professional to prepare your tax return may be better if your situation calls for it. Of course, fraudsters know they can make a quick buck and more during tax season.

The IRS calls these types of scammers “ghost preparers.” The AARP has a good write-up on how they operate. Often, they operate in a pop-up event like a community marketplace or near a shopping center. Or, they pitch their services through social media posts and digital ads.

A ghost preparer may advertise their services as cheaper than the competition. However, they may also operate in ways that absolve them of accountability. Or worse, leave you responsible for any mistakes they make on your tax return.

Ghost preparers are especially risky because working with them risks your finances and sensitive information. Do not work with a person claiming to be a tax professional if:

• They do not have a Preparer Tax Identification Number (PTIN).
• They ask for payment in cash.
• They don’t give a receipt.
• They do not sign your tax return.
• They make you sign a blank tax form.
• They ask that your refund get sent to a bank account that isn’t yours.
  

The AARP article linked above has more tips on how to spot and avoid ghost preparers.

When working with a professional tax preparer, always vet service providers thoroughly. You can start by requesting a professional’s PTIN. The IRS also keeps a searchable database of registered tax preparers and a guide on tax professional credentials and qualifications.

Although tax season can be stressful, it is always worthwhile to play it SAFE. First Florida is committed to helping you keep your financial information secure. Visit our Scam and Fraud Education page to learn more about how you can fight against identity theft.