Tag: Identity Theft

  • Beware the tax scam…with prevention tips

    Beware the tax scam…with prevention tips

    Scams targeting tax information are being reported more frequently than ever this year. 

    To avoid problems, get to know how the IRS communicates (as opposed to how scammers try to target you).  

    The IRS never initiates contact via phone, email, text, or social media. The IRS does not call to demand payment, ask for credit card numbers, or threaten arrest.  The IRS might call after you have received multiple letters regarding a scheduled audit or appointment or unpaid balances, but this is rare.  

    If someone comes to your home or business saying they are a Revenue Agent, they will generally have two forms of official credentials: a pocket commission and an HSPD-12 card (both with photo and serial number), which you can verify by phone. A pocket commission is a red leather-bound credential with a serial number and a photo ID.  Before discussing tax matters, ask for their credentials, name, and contact information.  Confirm their identity by calling the IRS directly.

    Official IRS communications are sent through regular mail, the U.S. Postal Service.  If you owe taxes or have a change made on your tax return by the IRS, you will receive a notice in the mail as a first contact.  IRS communications are sent using form letters that have a code number in the upper right hand corner.

    Some common letters numbers sent by the IRS include:

    • CP2000 – Underreported Income
    • CP14 – Balance Due
    • CP12 – Refund Adjustment
    • CP501 – Balance Due Reminder
    • CP75 – EIC Refund Delay

    Unfortunately, phone scams continue to evolve, including calls that use computer-generated tactics and spoofed caller ID to appear legitimate. The IRS will generally not reach out to you by phone or text.

    The IRS contacts taxpayers by mail first and does not leave urgent, threatening prerecorded messages, call to demand immediate payment, or messages that threaten arrest.  

    Do not answer SMS text messages or click links with requests for tax information.  These are scams.

    Other Actions You Can Take to Avoid Scams:

    1. Filing tax returns as early as possible can help to beat a fraudster return.  Sometimes the earliest clue that a fraudulent return has been filed is an electronic rejection of your real tax return with the reason of “social security number already used.”  Check for any typos or misinformation, then contact the IRS 800-829-1040 and plan to file the tax return by paper (print it out, sign, and submit with all additional documents by certified mail). Completing form 14039 Identity Theft Affidavit may also be needed.
    1. Requesting an IP PIN (Identity Protection PIN)  is very effective in shutting down fraudulent returns. Everyone is eligible to request an IP PIN.  It needs to be requested each year and becomes available in January.  Note:  the IRS will never ask for your IP PIN.  Phone calls, emails or texts asking for your IP PIN are scams. Register for an Identity Protection PIN (IP PIN) online via the IRS Get an Identity Protection PIN page using ID.me to verify your identity. The fastest method is the “Get an IP PIN” tool on IRS.gov.  

    It used to be that only people who experienced fraud could request a PIN (those folks may still receive a CP01A letter with a PIN each year), but now the IP PIN program is open to everyone.  

    An IP PIN is a six-digit PIN issued by the IRS after you verify your identity with ID.ME.  After an IP PIN is issued, if a tax return is attempted to be filed without the PIN, it will be rejected by the IRS.  Requesting the IP PIN protects your ability to file your return electronically. 

    As of July 2024, it is reported that approximately 10 million people registered for an IP PIN.  With over 165 million people filing individual income tax returns annually, I am surprised that more people don’t take advantage of this tool to discourage fraud.

    1. Verify the credential status of tax preparers.  Tax preparers with professional credentials are licensed by the IRS (Enrolled Agents) or by the state (CPAs and Tax Attorneys).  Check for credentialed tax preparers in your area using the search tool:  https://irs.treasury.gov/rpo/rpo.jsf
    1. Verify the tax status of any charities soliciting contributions.  Keep in mind that status can change over time. Only “qualified” charities are eligible for tax-deductible contributions.  You will need the EIN for the organization often found on the web page or on stationary of a reputable charity.  Use https://apps.irs.gov/app/eos/ to verify status.
    2. Be cautious about taking tax advice from social media sites.  Fraudulent tax deduction schemes are rampant (particularly regarding fuel tax credits and self employed credits).  Always confirm eligibility for credits using IRS source information or confirm with a tax expert.

    In sum, the best recommendations by experts are to be cautious and remember that the IRS does not generally reach out via phone, email, or text messages.  Verify information about tax deductions before making any contributions.  Consult the IRS website or work with tax experts when you need advice or assistance preparing tax returns.

    Additional information links

    IRS Dirty dozen tax scams for 2026 https://www.irs.gov/newsroom/dirty-dozen-tax-scams-for-2026-irs-reminds-taxpayers-to-watch-out-for-dangerous-threats

    Ways to tell if the IRS is reaching out or if it’s a scammer  https://www.irs.gov/newsroom/ways-to-tell-if-the-irs-is-reaching-out-or-if-its-a-scammer

    Get an identity protection pin (IP PIN)  https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin

    Tips to help taxpayers hire a reputable tax preparer https://www.irs.gov/newsroom/tips-to-help-taxpayers-hire-a-reputable-tax-preparer

    Understanding tax return preparer credentials and qualifications https://www.irs.gov/tax-professionals/understanding-tax-return-preparer-credentials-and-qualifications