Look Out for These 3 Tax Season Scams

Look Out for These 3 Tax Season Scams

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It seems like every year, a new round of scams makes the rounds during tax season. This year, the filing date has been extended from April 15 until May 17, 2021. There are three tax scams you should be aware of this filing year.

1. IRS email impersonation scam

The scam is so prevalent, at the end of March the IRS issued an alert about it. The scam first targeted students and teachers, focusing on anyone that had a “.edu” in their email address. However, as we are now in the heart of filing time, you should be on the lookout for an expansion of this scam to anyone and everyone.

How the scam works: The fake emails use authentic IRS branding as well as subject lines such as “tax refund payment” and “recalculation of your tax refund payment.” The scammers hope to trick recipients into thinking they can claim their refund by clicking on the link and submitting information via a web form. In the form, it prompts you to provide a slew of personal information including your Social Security number, driver’s license number and electronic filing pin.

Once the scammers have this data, they can use it to file fake tax returns for teachers and students at universities, as well as private businesses and nonprofit organizations.

If you receive such an email, reported to the IRS at: phishing@irs.gov

2. “Ghosts” tax preparer scam

First, to protect yourself against such a scam, you should always choose an established and qualified tax professional. Scams like the following take root when people try to save money on filing their tax returns by hiring individuals whose credentials they may not have verified beforehand.

How the scam works: The so-called “ghost” tax preparer prints the return without signing it on their end as well as not providing their preparer tax identification number (PTIN). This is required by law for tax preparers. They give the completed, unsigned on their part, tax return to the taxpayer, instructing them to sign and mail it. The scam occurs because the “ghost” preparer goes back and charges additional fees based on the size of the refund or directs the refund to be sent to their own bank account, rather than that of the client.

3. EFIN scam

The IRS issued an alert concerning the theft of electronic filing identification numbers (EFINs) through fake emails. Individuals as well as tax preparers have been targeted in this scam. The IRS warns not to click on any links in such emails or open any attachments. Instead, these should be reported to the IRS by emailing: phishing@irs.gov

How the scam works: A fake but authentic-looking email pretending to be from the IRS is sent to a recipient telling them that the department has to verify “all authorized e-file originators” in order to begin processing their e-filed return. The fraudulent email requests that the recipient send a PDF copy of their IRS-issued EFIN along with a copy of their driver’s license as a precaution against losing access to their account. The scammers then have the information they need to impersonate their victims, allowing them to file fraudulent returns in their names.