Beware: Common Identity Theft Scams and How to Safeguard Yourself

Identity thieves and scammers are becoming more sophisticated each year, resulting in stolen personal data, significant financial loss, and even legal consequences.

To help protect yourself it’s essential to stay informed about the most prevalent scams. Below are some of the most common tactics scammers are using and steps you can take to protect yourself and your loved ones.

Common Tax-Related Scams

  1. Phishing Scams
    Scammers send unsolicited emails or text messages that appear to be from the IRS, attempting to steal your personal information. These messages often claim there are issues with your tax return or offer unexpected refunds, prompting you to provide sensitive details.
  2. Phone Scams
    Fraudsters impersonate IRS agents, threatening immediate legal action or arrest unless payment is made right away. Payment is often demanded through gift cards or wire transfers, which are difficult to trace.
  3. Identity Theft
    Criminals use stolen personal information to file fraudulent tax returns and claim refunds in your name. Protecting your personal data is essential to prevent this type of scam.
  4. Fake Tax Preparers (“Ghost Preparers”)
    Some individuals pose as tax professionals without the proper credentials. They may charge fees for nonexistent services, fail to sign your tax return, or submit fraudulent returns.
  5. Unclaimed Refund Scams
    Scammers may send fake messages claiming you have unclaimed tax refunds, urging you to provide personal information in order to “claim” the refund.
  6. Employee Retention Credit (ERC) Scams
    Fraudsters target businesses by promoting false claims for the ERC, a pandemic-era tax credit, even if the business doesn’t qualify. They may charge high fees for assistance with the application process.
  7. Fake W-2 Scams
    Scammers may encourage taxpayers to falsify W-2 forms in order to inflate refunds. This can lead to severe penalties and legal consequences.
  8. Donation and Charity Scams
    During tax season, scammers impersonate legitimate charities to solicit donations. Always verify the legitimacy of a charity before making a contribution.
  9. Tax Preparer Fraud
    Dishonest tax preparers may falsify information on your tax returns to inflate refunds, charge excessive fees, or fail to sign the return altogether.
  10. Refund Calculation Scams
    Scammers may claim they’ve recalculated your refund and ask for personal information to “process” a new refund.

Protective Measures to Take

  • Verify Communications: The IRS will not initiate contact through email, text, or social media. Always verify any unsolicited communication by contacting the IRS directly.
  • Safeguard Personal Information: Be cautious when sharing personal or financial information online or over the phone.
  • Choose Tax Preparers Wisely: Ensure your tax preparer is legitimate and holds a valid Preparer Tax Identification Number (PTIN).
  • Report Scams: If you encounter a tax scam, report it to the IRS or the Social Security Administration to help protect others.
  • IRS Identity Theft Protection Tool: Use this security feature to prevent fraudulent use of your Social Security number on federal tax returns by obtaining a unique six-digit PIN. Learn more here: IRS Identity Protection PIN.

For more information, visit:
irs.gov
ssa.gov

Additional Resources & Articles

Stay vigilant and informed to protect yourself and your financial security against evolving tax-related scams.

Recipients should not act on the information presented without seeking prior professional advice. Check with your advisor about your specific situation or contact Copper Leaf Financial at 802.878.2731.