Fake IRS Emails, Phishing Scams
Did you recently receive an email to your Outlook email, Comcast or Xfinity email, Gmail, or other inbox from the IRS? Did you know that are impersonators out there who use fake IRS credentials to try to steal your information through a process called phishing? Read below to learn about these scams and how to identify them.
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The IRS categorizes any email scam that involves tricking victims into revealing personal and financial information over the Internet as "phishing." The phishing definition is the act of sending emails impersonating a company or person in order to obtain your personal information. Smishing is the same practice done via text, iMessage, or smartphone SMS message.
The IRS does not initiate contact via email, text message, or social media channels. They do not demand, make threats, or ask people for PIN numbers, passwords, or other details or credentials for their credit card, bank, or other financial accounts. Every year, the IRS alerts taxpayers to the latest versions of these email scams.
Additionally, the IRS enforces multiple means to protect the identities of taxpayers. The IRS will not accept an e-filed tax return without the exact previous year adjusted gross income (AGI) and/or the most recently issued IRS Identity Protection PIN or IP-PIN. As per law, to enforce security and identity protection, state tax returns can only be e-filed if they are submitted with the federal return with the exception of California state returns.
Are There IRS Tax Scams Happening?
The IRS is always warning of various scams to watch out for as well as providing tips, like a reminder to only enter accurate information from your W-2 and 1099 tax forms onto your return or into tax software. Several schemes circulating on social media have encouraged taxpayers to enter inaccurate W-2 entries in order to receive a large tax refund. Do not fall victim to this trick as the IRS will catch this.
When you file your taxes online, only enter figures from your tax forms exactly as they appear on your employers issued form.
In recent years, the IRS saw mass amounts of various tax credit forms being used to file fraudulent returns. These forms were able to be used to create fake information and claim a large credit, some as large as five figures. Remember to only report accurate, honest information on your income tax return.
The forms involved in these scams were:
- Form 4136, Credit for Federal Tax Paid on Fuels
- Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals
- Schedule H, Household Employment Taxes.
KEY TAKEAWAYS
- Beware of fake IRS emails and phishing scams that attempt to steal your personal information. The IRS will never initiate contact with you via email about a tax bill, refund, or personal information.
- Scammers often use scare tactics, such as threatening arrest or legal action, to trick you into providing personal or financial information. Remember, the IRS will not threaten you over email or phone. If you receive such a message, report it immediately.
- If you need to send tax payments to the IRS, always make the check payable to the U.S. Treasury. Never write the check to a third party. Ensure you send your federal tax payment to the real IRS mailing address based on your location. However, we highly recommend paying IRS and state taxes online.
- If you receive an unsolicited email claiming to be from the IRS, do not click on any links or open any attachments. Forward the email to phishing@irs.gov and delete it from your inbox.
- If you believe you have accidentally provided your information to identity thieves, the IRS suggests immediately creating an IP-PIN and keeping it safe so no one can file a return with your information.
What Is the IRS "Dirty Dozen" List?
The IRS provides a collection of scams each year called the "Dirty Dozen" list; this warns taxpayers, tax professionals, and financial institutions of these schemes so more can be aware of them.
Such recent scams included the Employee Retention Credit (ERC) scams which were done through identify theft and filing a fabricated return with this credit, claiming a refund of tens of thousands of dollars. Though this is a valid credit for back taxes, for certain business owners it should not be abused or wrongly claimed if a taxpayer does not qualify for it. See details on changed or expired tax laws.
Similarly, promotors are encouraging taxpayers to erroneously claim the Credit for Federal Tax Paid on Fuels via Form 4136 when they do not qualify for it in order to increase their refund.
e-File your returns online with eFile.com - the eFile platform only uses valid IRS tax code laws and generates the proper forms based on your entries. You will not be wrongly persuaded to inflate your refund like tax preparers and other third-parties may encourage you to do.
What Are This Year's Dozen IRS Scams?
- Be mindful and aware of phishing or smishing scams designed to steal your data; these are emails and texts which get you to click on a link and provide critical identity information.
- Stay clear or aggressive promotors who may try to trick you into falsely claiming the Employee Retention Credit or other credit you don't qualify for through promises of a large tax refund.
- Watch out for scammers who offer help setting up an online IRS Account - this account holds sensitive information and is easy to set up on your own.
- Be aware of promotors and scammers pushing you to falsely claim the Fuel Tax Credit which most do not qualify for or other tax credit which you don't qualify for.
- Be cautionary of phony services offering support for an IRS Offer in Compromise (OIC); these advertisements or pitches claim that their services are needed in order to resolve your IRS debt.
- Learn to identify and avoid fake charities aimed at exploiting your generosity; they may urge donations and promise a tax deduction by posing as a phony charitable organization.
- Avoid "ghost preparers" or untrustworthy tax preparers who take your cash and personal information while filing a false return. File your taxes on eFile.com so only you have access to your sensitive data.
- Refrain from taking advice from "influencers" on social media who may lure you into using falsified information on your income tax return to get a large tax refund. This is considered fraudulent and could get honest taxpayers in trouble for falling for a social media post or trend.
- The IRS provided details on "new client" scams to tax professionals and business in order to help reduce compromised information - eFile.com has several security measures in place to keep you and your data safe.
- For high income earners, be mindful of scams that may target you specifically - the IRS warns of more aggressive schemes designed to compromise your information.
- Recognize and avoid bogus tax strategies, such as hiding or concealing your currency in foreign accounts or other illegal strategy.
- This year's "Dirty Dozen" only had 11 entries despite being called a dozen, so here is our own twelfth entry: Avoid unsafe practices and file your taxes on eFile.com! eFile is an IRS-authorized e-file platform that uses only current IRS data to help you file your taxes online. There is no need to worry about scams with a secure eFile account and free Taxpert support.
The 2023 Dirty Dozen was made up of these tax scams to watch out for:
- Abuse and false claim of the Employee Retention Credit
- Email and text message scams for tricking people into handing over personal information - see details on phishing and smishing scams below
- Fake or fabricated help setting up an IRS Account used to steal your information
- Third-party promotors of false fuel tax credit claims
- Fabrication of fake charities encouraging or pressuring taxpayers into donating to a fake organization, often using the tax deduction for donations as reason
- Choose the right tax preparer to avoid shady or nonqualified tax preparers - or, simply e-file your taxes online through a DIY platform
- Be aware of schemes or false tax information spread on social media; keep up with valid tax news and expired or changing tax laws
- Spearfishing and other scams targeting tax professionals and businesses - see how eFile.com keeps your information safe
- Be aware of fake Offer in Compromise business, services, or "mills" that mislead taxpayers by telling them that they can settle a tax debt by paying a smaller fee - only set up an Offer in Compromise through the IRS.
- Scams aimed high-income filers including Charitable Remains Annuity Trusts as well as monetized installment sales.
- Be aware of false tax schemes aimed at illegally reducing or avoiding taxes.
- Scams or schemes including international elements such as offshore accounts or digital assets.
The IRS separated the 2022 Dirty Dozen into these categories:
- Use of Charitable Remainder Annuity Trust or CRAT in order to eliminate taxable gain
- Maltese or other foreign pension arrangements misusing treaty
- Puerto Rican and other foreign captive insurance - this occurs when a U.S. owner claims a deduction for "insurance coverage" that is provided by the fronting carrier
- Monetized installment sales - this allows the seller to receive sales through purported loans
- Economic Impact Payment (EIP) and tax refund scams
- Unemployment fraud, inaccurate 1099-G
- Fake employment offers via social media, email, etc.
- Fake charities set up to steal money of unsuspecting donators
- Concealing assets in offshore accounts; improper reporting of digital assets
- High-income individuals not filing tax returns
- Abusive syndicated conversation easements
- Abusive micro-captive insurance arrangements.
What Types of Scams Are Going Around?
- Pandemic or hardship-related scams - potentially related to theft of Economic Impact Payments or stimulus checks, designed to trick those seeking help into providing their information.
- Personal information cons - a more common form of scam, includes phishing, ransomware, malware, etc.
- Ruses focusing on unsuspecting victims - most common, includes fake charities and often targets seniors or elderly.
- Schemes that persuade taxpayers into unscrupulous actions - examples include fake Offer In Compromise agreements which lure the victim into a feeling of security before the scam.
Most of these scams begin with an email; learn below on how to tell if an email is fake or a scam.
What Are the Latest Email Scams?
Emails can be used to get unsuspecting users to click on links and give up their information. Learn to watch out for phishing emails or scams by making yourself familiar with identifying fake emails. Below are some of the most recent email tax scams:
- Spear phishing scams: What is spear phishing? The IRS is warning tax professionals and taxpayers of IRS scammers which attempt to steal their tax software preparation credentials. If you use eFile.com or any other software, be on the lookout for emails that claim "your account has been put on hold" or "open this email to unlock your account" as these are scams trying to get users to sign in with their login credentials. We at eFile.com will only send emails from support@efile.com.
- The latest email scams claim that "Your account has been put on hold" or "Action required" for this matter and include logos of the IRS and/or tax preparation platform.
- You may also get one that says to "update your IRS e-file immediately” by clicking the link and entering their information on the website that opens. The emails mention IRSgov and USA.gov, but not IRS.gov (IRS-dot-gov).
- Emails, texts about tax refunds, advance Child Tax Credit (CTC) payments, or Stimulus Checks: Fake emails or text messages may be sent requesting information in order for a person to verify their identity to claim their advance Child Tax Credits payments or stimulus payments as part of the third stimulus bill. The IRS is no longer issuing stimulus checks or CTC payments as of December 31, 2021, so do not fall victim to this lie. Another widespread email tells taxpayers the IRS is holding a tax refund for them and asks for financial account information; this is always fake.
- Unemployment fraud: Scammers may have claimed unemployment benefits by filing fraudulent claims using stolen identities; these payments went to the thieves while the person whose identity was compromised received a 1099-G. If you receive a 1099-G with suspicious information, like amounts you did not receive, you may have been affected by this. Contact the appropriate state tax agency.
- Emails to students: Students are often targeted because all it takes is one student to click on a link to give the scammer access to a mailing list of all students, spreading these emails. The email may state that something needs updating regarding your recent return or school account in order to receive your tax refund and may ask you to click a link and fill an online form.
The IRS will never initiate contact via email - if you receive an email requesting information, containing links, and claiming to be the IRS or associate with the IRS, it is likely a scam.
How to Identify Fake Emails?
Any email from the IRS is a scam if they are initiating contact first. It can be helpful to know how to identify one of these emails based on some identifying factors; this applies to scams in general, not just IRS phishing emails.
- Subject Line: The subject line should always be something regarding what the email will be about. You may see the subject line of URGENT or ATTENTION; these are only done to catch your eye. This is common; the email is likely not urgent and is only included so the recipient will panic and open the email.
- Greeting: If you have an account with a company, they will almost always address you by your name. If you are certain that you have an account with a company who you received an email from and they use a generic greeting, such as "sir" or "ma'am," be wary of this when reading the rest of the message. For example, emails from eFile.com will always include your username if you have an account with us.
- Links: The email will have a link, requesting that the recipient click it and enter some information. You may be asked to enter your personal information to receive a payment or that you need to verify your identity to unlock your account. Doing so would give your information directly to someone who should not have it. Inspect the link and take note of why you are being asked to click on it.
- Message: The bulk of the email will try to convince you to click their link or button and enter your information as soon as possible. They want a passcode, your bank numbers, or other personal information. Be aware of the language in the email; if you do click the link, note the address of the page, the legitimacy of the page, and review the information being requested.
- Sender: If some of the above information has raised your concern, see where the email is coming from. Scammers may use a variation of a company's email and even use the company logo as their contact, appearing as the company itself. Be sure that the sender is a person you know or a company email which you have interacted with before and/or recognize.
How Do the IRS and State Agencies Fight Email Tax Scams?
The IRS and the Treasury Inspector General for Tax Administration (TIGTA) work with the U.S. Computer Emergency Readiness Team (US-CERT) and various Internet service providers and international CERT teams to have the phishing sites taken offline as soon as they are reported.
The IRS, in collaboration with state tax agencies, representatives of the software industry, and other tax preparation firms, has established the Security Summit. This organization combats identity fraud by assigning groups to various areas.
These programs rely largely on consumers who receive these emails as they are needed to report the websites, emails, and phone numbers.
How to Identify Scam Calls?
Scammers may contact you through your cellphone or landline telephone number. These can be IRS impersonations claiming to require payment of debt, but there are many other scam phone callers.
Scammers may take on various roles either over the phone or via email.
- In addition to IRS impersonators, scammers may impersonate a company. The scammer may provide the company name, their fake employee name, plus a fake employee identification number, reference number, or customer service level number.
- These callers may have more extreme tones, including angry or threatening, but they may also be friendly and deceiving. Be sure to ask questions; ask them to confirm a detail about your account, the order number of the transaction in question, or other detail only you and someone with your account information would know. Any customer service representative would not threaten you, especially the IRS.
See how eFile.com keeps your personal data secure - and never give out your personal information unless you are certain you can trust the requesting entity.
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