An update from the IRS on the latest scam targeting taxpayers.
Tax season is upon us and, once again, the IRS is reminding people to be aware of and alert to potential scams as you prepare and file your taxes. Thousands of people have become victim to tax fraud, losing not only their money but also their personal identification to scammers.
The latest tax return scam has been reported as “ghost tax return preparers” who defraud unsuspecting taxpayers by offering a service to file their taxes. These scammers start by promising a large tax refund with fees charged based on a percentage of the refund they promise to you. Once the unsuspecting taxpayer agrees to this service, the tax return preparer is never heard from again, taking with them your personal identification information and your money.
Red Flags to Identify Scammers
Often, these fraudulent events start with email and phone calls directly to you. The IRS has identified several ‘red flag’ actions that these ghost tax preparers may take, including:
- The scammer refuses to sign the tax return as the paid preparer, and instead, they instruct the taxpayer to print, sign and mail the return to the IRS.
- The scammer refuses to digitally sign an e-filed return as the paid preparer that they have prepared for the taxpayer.
- The scammer requires cash payment for filing and does not provide a receipt upon said payment.
- The scammer makes phony claims about being able to increase the taxpayer’s income to qualify their clients for tax credits or to increase refunds.
- The taxpayer’s refund never makes it into their bank account and instead is directed into the scammer’s bank account.
It’s especially important to note that by law, every paid preparer, including someone paid to assist in preparing federal tax returns, must have a valid 2019 Preparer Tax Identification Number (PTIN). The paid preparer must sign the return and must include their PTIN. Refusing to sign the tax return is therefore the most glaring red flag for potential fraud. If you observe any one of these actions, you should report the fraudster and the fraudulent activity to the IRS immediately.
Be Aware of How the IRS Contacts Individuals:
The IRS generally makes contact first by mailing you a bill if you owe taxes. As a reminder, the IRS will never:
- Call you to demand immediate payment be made using a specific payment method like a prepaid debit card, gift card or wire transfer.
- Threaten you with arrest by police or other law-enforcement groups for not paying your taxes.
- Demand that you pay taxes without providing the opportunity to question and/or appeal the amount they report that you owe.
- Ask for credit or debit card numbers over the phone.
For more information on this latest “ghost” tax scam, as well as additional resources for information on fraud protection and awareness during the tax season, go to: https://www.irs.gov/newsroom/tax-scams-consumer-alerts.
You can also contact your local SIS branch Assistant Manager with any questions, comments or concerns about securing your information online. We are always here to listen and to help!