Tax scams are becoming more sophisticated and constantly evolving. The best way to protect your personal information is to be informed. Below is a list of the common tax scams and tips for how to avoid them.
Identity Theft. Identity theft occurs when someone uses your identity to commit fraud or other crimes. This personal information can include your name, Social Security Number or other identifying number. In regards to tax fraud, an identity thief uses a taxpayer's personal information to file a fraudulent tax return and claim a refund.
How to protect yourself: If you believe you have had your personal information lost or stolen, contact the IRS Identity Protection Specialized Unit at 800-908-4490. The IRS will then take action to secure your tax information.
Telephone Scams. One example of a phone scam is when callers tell the victims they owe money or are entitled to a large refund. Phone scams take on many variations, but the IRS has identified common traits:
In some calls, thieves threaten arrest or confiscation of the victim's driver's license, then hang up and promptly call back, claiming to be from the local police department or Department of Motor Vehicles (DMV). The caller ID that the victim sees supports the claim made in the previous call that the police or DMV will be in touch.
Another phone scam, while possibly affecting taxpayers throughout the country, specifically targets immigrants. Victims are told they owe money to the IRS and that payment must be made promptly through a bank card or wire transfer. If the victim refuses to pay, the caller threatens the victim with arrest, deportation or the suspension of a business license or driver's license. Frequently, the caller becomes hostile and insulting to the victim.
How to protect yourself: If you receive a phone call from someone claiming to be from the IRS, the best way to protect yourself is to know your tax situation. If you owe (or think you may owe) taxes, contact the IRS directly at 800-829-1040. IRS employees will assist you with payment options or help resolve payment issues if applicable.
If you do not owe taxes or have no reason to believe you owe money to the IRS, call and report the incident to the Treasury Inspector General for Tax Administration at 800-366-4484.
If you have been a target of a phone scam, you should also contact the Federal Trade Commission (FTC) and file a complaint using the FTC Complaint Assistant at FTC.gov. Please add IRS Telephone Scam to the comments of your complaint.
Phishing. Phishing is a scam generally carried out with the use of unsolicited email or a fake website that poses as a legitimate site. This is done to lure in potential victims and prompt them to provide confidential personal and financial information. Once the criminal has this personal data, crimes involving identity or financial theft can be committed.
How to protect yourself: The IRS never initiates contact with taxpayers by email to request personal or financial information (including social media site(s) and text messaging). If you receive an unsolicited email that appears to be from the IRS or other organizations closely linked to the IRS, report this website to the IRS by emailing email@example.com.
False Promises of "Free Money" from Inflated Refunds / Return Preparer Fraud / False Income, Expenses or Exemptions. Criminals may pose as tax preparers during tax season. The fake preparers often promise too-good-to-be-true tax refunds, especially to those taxpayers who are not required to file a tax return, such as low-income individuals and the elderly. Another demographic thieves commonly target is non-English speaking individuals, who may or may not be required to file a tax return.
How to protect yourself: You are legally responsible for the content of your return, even if a professional prepares it. If a false refund is claimed on your behalf, you will most likely be responsible for paying the money back to the IRS, which may include accuracy and fraud related penalties.
Always review your return before signing and filing. If you have questions on anything contained in your tax return, be sure to ask questions and understand the accuracy of the return before filing and signing.
Impersonation of Charitable Organizations. Following major disasters, it's common to find criminals impersonating charities collecting money and personal information from well-intentioned taxpayers. Some scammers may contact people by telephone or email to solicit "donations" or other financial information such as bank account numbers. Others contact disaster victims, claiming to be working on behalf of the IRS to help victims file casualty loss claims on their tax return.
How to protect yourself: When donating to a charitable organization, follow these tips:
While criminals will continue to find ways to steal, you can protect yourself by following the advice of the IRS.
January 1 — Everyone
Federal Holiday (New Year's Day) Details
January 10 — Employees who work for tips
If you received $20 or more in tips during December, report them to your employer Details
January 15 — Individuals
Make a payment of your estimated tax for 2018 if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES Details
January 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in December 2018
January 15 — Farmers & fishermen
Pay your estimated tax for 2018 using Form 1040-ES Details
January 21 — Everyone
Federal Holiday (Martin Luther King, Jr. Day) Details
January 31 — All Employers
Give your employees their copies of Form W2 for 2018. If an employee agreed to receive Form W2 electronically, have it posted on a website and notify the employee of the posting.
January 31 — Individuals who must make estimated tax payments
If you did not pay your last installment of estimated tax by January 15, you may choose (but are not required) to file your income tax return (Form 1040) for 2017 by January 31. Filing your return and paying any tax due by January 31 prevents any penalty for late payment of the last installment. If you cannot file and pay your tax by January 31, file and pay your tax by April 15.
January 31 — Payers of gambling winnings
If you either paid reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of Form W2G.
January 31 — Social Security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2018. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until 02-10 to file the return.
January 31 — Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2018. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is $2,500 or more for 2018 but less than $2,500 for the fourth quarter, deposit any undeposited tax or pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.
January 31 — Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2018. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.
January 31 — Federal unemployment tax
File Form 940 for 2018. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.
January 31 — All businesses
Give annual information statements to recipients of certain payments you made during 2018 Details