Tax season is fast approaching, and it’s time to file a return and claim your refund or pay off a bill. Unfortunately, criminals use scams like fake IRS letters to trick people into giving up their bank information or sending funds to false accounts.
Jim Pendergast, a senior vice president at speciality lender altLINE, said consumers already receive an influx of tax-related documents from banks and employers, giving scammers opportunities to prey on those who aren’t careful. The extra communication about COVID-19 relief checks may only add to the confusion.
Here’s what you need to know about fake IRS letters and other tax scams.
How to spot fake IRS letters
IRS letter scams often claim you owe taxes and demand you pay immediately. If you get one of these letters in the mail or via email, it is a fake. Be on the lookout for the following warning signs to try and spot fake IRS letters:
- The letter has a sense of urgency so you feel pressure to pay.
- The letter demands you send a prepaid debit card or wire transfer.
- The letter threatens legal action—such as arrest or immigration enforcement—if you don’t pay.
- The letter includes inaccurate contact information for the IRS. A Google search may confirm legitimate addresses and phone numbers.
- The letter requests that checks be made out to the “IRS” or “I.R.S.” Real payments are addressed to the Treasury Department.
Pendergast said the urgency conveyed in fake IRS letters is a huge red flag because the agency doesn’t make demands on taxpayers, who can also appeal tax disputes.
“Scammers know this, so they try to scare you into making some kind of immediate, knee-jerk digital payment,” Pendergast said.
The IRS does most of its communication with taxpayers via snail mail, so it can be tricky to distinguish real documents from fakes. If you’re unsure about the veracity of an IRS notice, you can search the name or the letter/notice number—found in the top or bottom right corner of the document—on the IRS’s Notices & Letters Search tool to get more information. You can also call 1-800-829-1040 to try to verify suspicious communication.
Other fake IRS scams
Scammers use other tactics like emails, text messages, phone calls and even social media to impersonate the IRS. Generally, you should be suspicious of any and all messages received through these channels. The IRS communicates with taxpayers primarily using notices sent via the United States Postal Service.
IRS imposter scams include tax collection demands as well as information verification schemes, a type of phishing scam in which criminals send you a link via text or email to confirm your personal information through a fake website.
Bottom line: If a person calls and says they’re from the IRS, if you get an email from a sender like IRS Online or if a text prompts you to confirm data for the IRS, do not engage. Try to learn more about who is sending you messages using a reverse email lookup and report these scams online to the Treasury Inspector General for Tax Administration.