Taxing Times: Steer Clear of the New IRS Scams

Learn about the tricksters’ latest IRS scams and pick up quick tips on how to avoid them: Internet ScamBusters™ #270

We’d like to extend a hearty welcome to Keith, our newest Scambuster. Keith helped us create this issue of ScamBusters — we think you’ll agree he did a great job!

Today’s issue is about brand new IRS scams. Tax season always brings out scammers in full force who use IRS scams to lure unsuspecting victims. This year, the government’s plan to make additional refunds to boost the economy gives the IRS scam merchants an extra edge. But understanding how the IRS operates can steer you clear of them.

We’ll explain this new IRS scam — plus four other currently hot IRS scams — and show you how you can avoid them.

On to today’s main topic…

Taxing Times: Steer Clear of the New IRS Scams

It didn’t take long for criminals to come up with new IRS scams to cash in on the government’s $170 billion stimulus package with tax refunds to boost the economy.

Even before Congress signed off on the proposal, tax scammers were phoning people, asking for their bank details so the IRS could supposedly deposit refunds directly into their accounts.

They bait their victims by suggesting this will mean a faster than expected refund, and they sometimes warn that if you don’t give the information immediately, you could lose your refund.

This IRS scam enables con artists to get bank account and Social Security numbers, as well as credit and debit card details that they then use for identity theft.

In fact, as we’ve said before, the Internal Revenue Service never, repeat never, asks for taxpayers’ personal information over the phone — or in emails. That’s not how it does business.

Even before this scam began, police were warning about the rash of IRS scams that appear at this time of year, mostly aimed at identity theft, taking control of PCs or simply duping people out of cash.

Most of today’s tax scams are variations on the themes we’ve been seeing over the past few years. You can catch up on some of these here.

“You’re Under Investigation”: A New IRS Email Scam

How to Recognize and Avoid the IRS Audit Scam

NEW IRS Notice is Really a Phishing Scam

Tax Scams: What You Really Need to Watch Out for

Four Currently Hot IRS Scams:

  1. In a new IRS scam aimed at seniors, the fakers tell the victim they can get his or her Social Security payroll taxes refunded for an upfront fee based on the size of the rebate, plus a percentage of the refund.Naturally, they say it will be a big refund and inflate their “fee” to match it, producing and filling in a tax form as “evidence.”Trouble follows: The law doesn’t allow a refund of taxes paid into Social Security and the taxpayer may end up having to pay penalties for filing a fraudulent return.
  2. A “we owe you money” email seemingly comes from the Internal Revenue Service. The subject line reads something like “Tax notification” or “2007 fiscal activity refund” and invites you to click on a link that takes you to a convincing-looking IRS website.But the site is an IRS scam, which as usual, asks for personal details. It can be quickly identified as fake. It has the same links as IRS pages, but when you click on them, the page simply refreshes instead of taking you to the link.And the bottom line again: The IRS does NOT send out refunds this way. If the IRS wants to get in touch, it sends a letter. The only way it collects your bank account details is if you choose to put them in your tax return. Period.
  3. Instead of claiming the IRS owes you money, another tax scam offers a reward to you for filing your return early. Again, a phone caller will ask for bank details.Not only does the IRS not seek such details by phone — but it also doesn’t pay rewards for early returns!
  4. Another sneaky trick is an email that offers taxpayers $80 for filling an online customer satisfaction survey. Of course, you’re expected to enter all your personal details on the form. Don’t fall for this — it’s a scam.

There are lots more IRS scams — more than 1,000 at the last count!

Some of them have been around for years, yet still find victims. For more information, check out our ScamBusters articles mentioned earlier, or visit the IRS website.

How to Spot an IRS Scam

IRS scammers try to convince you that their call or email is genuine in a number of ways. Here are some of the tricks they use to try to fool you:

  1. They invent a refund sum that sounds convincing — not too big and not too round. Something like $134.80 sounds legit, doesn’t it?Here’s an example making the rounds at the moment (all it would bring you, if you clicked the link, is a piece of spyware that installs on your computer).

    — begin scam email —

    From: Internal Revenue Service (IRS) [] Sent: Monday, January 28, 2008 11:35 AM Subject: Tax Notification

    Tax Notification Internal Revenue Service (IRS) United States Department of the Treasury Date: 01/28/2008

    After the last annual calculations of your fiscal activity we have determined that you are eligible to receive a tax refund of $134.80.

    Please submit the tax refund request and allow us 6-9 days in order to process it.

    A refund can be delayed for a variety of reasons. For example submitting invalid records or applying after the deadline.

    To access the form for your tax refund, click here.

    Regards, Internal Revenue Service Document Reference: (92054568).

    — end scam email —

  2. They use forms with numbers similar to those the IRS already uses; with a jumble of numbers and letters, they just sound right. However, they are not.
  3. They use the official IRS logo and, very often, copy whole sections of text from the IRS’s website.
  4. They use real names and copied signatures of senior IRS people, most recently the Director of IRS Exempt Organizations, or names of genuine independent groups like the Taxpayer Advocate Service.

The lesson is: Just because something looks official doesn’t mean it is.

Nonetheless, it’s easy to sidestep these tax scams if you just remember these few simple rules — in addition to the ones mentioned above — about how the IRS operates:

  • Remember that the only genuine IRS website is If any link takes you to a page that isn’t on this site, then you are not visiting the IRS website.(You should only type into your browser yourself and not get there by clicking a link.)
  • The only emails the IRS sends out concern general newsletters, events and that sort of thing. It never asks for financial information or discusses anything related to individual tax accounts by email.
  • The IRS never asks for PIN numbers, passwords or other confidential information for any reason or by any method — not even face-to-face.
  • Tax refunds are claimed through filing an annual tax return, not a separate application form.

One final warning for the tax season: Beware of advance refund loans: organizations offering to loan you the money you’re expecting to get as a tax refund this year.

Although they may be perfectly legit, many lenders charge huge rates of interest, plus administration fees, processing fees, and so on. You are basically paying through the nose to borrow your own money.

Sending your return in on time will sometimes get you your money in just a few weeks — without this hefty penalty. After all, you’ve worked for it, so make the most of it!

So, it’s easy to avoid these IRS scams — just a little knowledge and attention can do wonders.

Time to close — we’re off to take a walk. See you next week.