Every year, the Detroit Auto Show brings in visitors from around the world to see the newest models from major car manufacturers. The Consumer Electronics Expo gives us a chance to see all the new gadgets that will be on our wish lists come holiday time. Penny Arcade Expo unveils the year's new video games that our teenagers will be using to ignore their homework. For those of us who spend our days protecting other people's money, January is the time of year we get to see the newest makes and models of IRS scams.
That's right, they're back. Scammers are using tax time to take advantage of the unwary, and much like the newest Ford at the auto show or yet another iteration of the Madden video game, all of the hype is kind of disappointing, because this year's models look so much like last year's. What happened to innovation?
So let's take a look at the "new and improved' 2016 lineup of IRS scams. Of course, it's important to remember that innovation can happen at any time, so just because something isn't listed below, it does not mean it's not a scam. If you have any suspicion you're dealing with a scam, hang up, call the IRS or send an email to the Federal Trade Commission (FTC). Caution is your best approach.
The telephone scams
Up first is one of the oldest scams in the IRS scam lineup. You get a phone call from someone claiming to be from the IRS and claiming you owe money. They insist that if you don't pay right now, you'll go to jail. You might recognize this one as a variation on a grandparent scam or Nigerian Prince scam, but if not, the process is simple: You don't owe the money and the scammers are trying to get you to give them money they don't deserve.
If someone calls you claiming to be from the IRS, even if your caller ID says "IRS" or the like, hang up and call the IRS. If it's legitimate, then you will be able to find out from the IRS. If not, you'll find out right away. Remember, you have a right to an attorney, you can have your accountant present if you're being audited, and you have the right to due process no matter the charge. Don't ever assume you have to pay anyone right away just because they called you and demanded payment.
The email scam
One newer variation of the telephone scam is an email version carrying the same threat, but asking for much less money. This is a traditional phishing scam in which scammers ask for a modest sum that's payable online. Their hope is that you'll see a small amount, compare it to the terrible consequences they're threatening, and pay to make it go away. After all, who wouldn't spend $50 or $100 to make the IRS go away? Unfortunately, though, you won't be entering your financial info on a secure site that's provided by the IRS. You'll be entering your info on a dummy site that's set up by scammers to grab your credit card or checking account information. They'll in turn use that info to rack up all sorts of fraudulent charges.
As a rule of thumb, never, ever, follow the link in an email to a site where you may be asked to enter financial information. If you have an email from the IRS, see if you can find your account by going directly to the IRS website. The same is true for eBay, Amazon, and other retailers that scammers love to impersonate. Yes, it's easier to follow a link than it is to find the right page on your own, but scammers are counting on that. A few clicks could save you thousands of dollars.
The tax preparer scam
The final variation of this scam is the tax preparer phishing email scam. In this one, the goal is the same as the variation described above. Instead of impersonating the IRS, they're impersonating a tax preparer. They'll likely have some authentic-looking credentials, which are fake, and assure you everything's alright, but you need to update your info on the IRS' e-file page. The problem is, the link in the email doesn't take you to the IRS' page. It takes you to ... you guessed it! A dummy page that looks like an IRS page but actually captures the financial information you enter.
Don't be a victim. Always follow through with an extra phone call or email. Don't follow links that are provided in emails and don't assume that a webpage that looks OK must be OK. It's tax time, the time of year where we get a national math test, and math tests are stressful for everyone. Scammers know that and they prey on it.
If you suspect you've been the victim of identity theft, let us know. The sooner we know, the more protection we can offer. Also, file a complaint with the FTC and alert one of the major credit bureaus.