Stay alert this tax season: Common scams, how to avoid them

Scams are becoming more sophisticated each year, often mimicking official IRS communications or using new technologies to deceive taxpayers. Below are common tax-time threats to watch for and steps individuals can take to protect themselves: 

IRS impersonation emails and texts (phishing/smishing)

Scammers send messages pretending to be from the IRS, often using urgent language or QR codes that lead to fake IRS websites asking the individual to verify information or claim refunds.

• Avoid clicking suspicious links
  Unsolicited IRS-related messages may contain malicious links that can install malware or ransomware on a device, potentially compromising personal data.
• Report suspicious communications
  The IRS encourages taxpayers to report suspicious emails, direct messages or text messages claiming to be from the IRS. The IRS has launched an updated webpage, https://www.irs.gov/help/report-fraud, that allows taxpayers to confidentially report suspected tax fraud, phishing scams, evasion or other tax-related illegal activities.

Additionally, Purdue employees can report scam/phishing emails to Purdue IT by right-clicking on the message and scrolling down to “Report” in Outlook. Individuals also can forward the suspicious email to abuse@purdue.edu or security@purdue.edu. For more details, see How do I report phishing e-mails?

AI-enabled phone scams

Fraudsters may use robocalls, voice-cloning technology and spoofed caller IDs to make calls appear to come from legitimate organizations like the IRS.

• Know how the IRS contacts taxpayers
  The IRS typically initiates contact with taxpayers by regular mail first and does not demand immediate payment, threaten arrest or leave urgent prerecorded voicemail messages, phone calls or emails.
• Verify tax information carefully
  Taxpayers should not rely on AI-generated responses for tax advice or calculations. Always verify important financial information through trusted sources or tax professionals.

Fake charities:

Scammers may create fraudulent charities, especially after disasters, to collect donations and personal information.

• Use the IRS search tool
  Search the official IRS Tax Exempt Organization Search Tool to confirm tax-exempt status.
• Check charity watchdogs
  Use Charity Navigator, GuideStar and the BBB Wise Giving Alliance to review ratings and CharityWatch for financial efficiency.
• Recognize the signs of a scam
  Pressure to donate immediately, requests for wire transfers or gift cards, vague details on how donations are used, and names that sound similar to well-known charitable organizations. 

Along with staying alert about scams during tax season, it’s also helpful to understand how legitimate tax agencies typically communicate with all taxpayers. Knowing what to expect from the IRS and state departments of revenue can help you quickly recognize suspicious messages and avoid potential fraud.

Facts to know about IRS and state departments of revenue communications

• Official communication almost always arrives by mail
  The IRS and most state departments of revenue generally contact taxpayers through a letter sent via the U.S. Postal Service.
• Letters are sent to the address on an individual’s most recent tax return
  This is usually the last address listed on your most recently filed return.
• Email contact is rare
  In most cases, taxpayers will not receive an email from the IRS or state tax agency. Emails are typically only used if you already have an open case with the agency and have provided an email address as a contact method.
• Individuals need to update their address with the IRS and state tax authority if they’ve moved
  If a taxpayer has moved since filing their last tax return, they should submit Form 8822 (change of address) to the IRS. Each state has its own change of address form available on its website. That form would also need to be completed and submitted to the state tax authority.
• Consider creating an online IRS account
  Taxpayers are encouraged to create a secure account at www.irs.gov. Through the account, individuals can review past and current tax filings, check refund status, view balances due, and stay current with information regarding any outstanding issues. Many state tax agencies also offer similar online accounts for taxpayers.

Questions

Individuals should contact their tax advisor or a trusted tax professional for guidance if they have questions about their tax situation — such as which forms to use, how to handle a challenge and to inquire whether a message received is legitimate.