Scammers are constantly devising new and creative ways to defraud unsuspecting individuals and businesses. It’s crucial to be aware of the prevalent scams that may threaten your financial security any time of year.

Phishing Emails: A Deceptive Net

Phishing emails are a common method used by scammers to trick individuals into divulging personal and financial information. These emails often appear to be from reputable sources, such as the IRS or your tax preparer. They may contain links to fake websites that mimic legitimate ones, aiming to steal your sensitive data.

Signs of a phishing attempt

• Generic greetings
• Urgent and threatening language
• Unusual sender email addresses
• Requests for personal or financial information

How to protect yourself

• Verify the sender’s authenticity
• Be cautious with email attachments and links
• Use strong, unique passwords
• Enable two-factor authentication for email accounts

Fake IRS Calls: Impersonating the Tax Authority

Impersonating the IRS is a classic scam that resurfaces periodically. Scammers use scare tactics, pretending to be IRS agents and claiming that you owe back taxes. They threaten legal action or arrest if immediate payment is not made.

Red flags to identify fake IRS calls

• Demanding immediate payment
• Threatening with arrest or deportation
• Refusing to provide official documentation
• Requesting payment through unusual methods

Actions to take if targeted

• Hang up and don’t engage
• Contact the IRS directly to verify your tax status
• Report the scam to the Treasury Inspector General for Tax Administration (TIGTA)

Identity Theft: A Persistent Threat

Tax-related identity theft occurs when a scammer uses your personal information to file a fraudulent tax return and claim your refund. This can lead to delayed refunds, legal complications, and damage to your credit.

Steps to prevent identity theft

• Safeguard your Social Security Number (SSN)
• File taxes early
• Use secure and unique passwords
• Monitor your credit report regularly

What to do if you’re a victim

• Report the identity theft to the IRS
• File an Identity Theft Affidavit (Form 14039)
• Monitor your financial accounts and credit reports

Social Engineering: Manipulating Trust

Social engineering scams involve manipulating individuals into divulging confidential information. Scammers employ psychological tactics to gain trust and extract personal details.

Techniques used in social engineering scams

• Pretending to be a trusted contact
• Appealing to emotions or urgency
• Creating a sense of familiarity

How to protect your personal information

• Verify the identity of callers or email senders
• Don’t share personal information over the phone
• Educate yourself and your family about common scams

Refund Fraud: Stealing Your Tax Refund

Refund fraud occurs when scammers file false tax returns in your name, claiming your refund. This can result in delayed refunds, identity theft, and substantial headaches.

Understanding refund fraud

• Filing a fraudulent return
• Receiving a refund you didn’t request
• Tax-related identity theft

Ways to safeguard your refund

• File early and electronically
• Protect your personal information
• Be cautious with tax preparers
• Monitor your refund status

Cryptocurrency Scams: A New Frontier

As cryptocurrencies gain popularity, scammers have started using them in tax-related scams. Be cautious when dealing with virtual currencies and stay informed about potential risks.

The rise of cryptocurrency in tax scams

• Fake cryptocurrency tax services
• Phishing attempts targeting crypto investors
• Ponzi schemes involving digital currencies

Spotting cryptocurrency-related tax scams

• Verify the legitimacy of cryptocurrency platforms
• Don’t share private keys or wallet information
• Report suspicious activity to relevant authorities