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Don't Fall Victim to Tax Scams

It’s that time of year, when we gather our W-2s, 1099s and all the other forms and documents we need to file our taxes. However, it’s also busy season for tax scammers. How can you avoid being scammed?

Your chief defense, of course, is to recognize a scam. Here are some of the most common ones:

Tax-related identity theft – Some thieves might try to steal your personal information and file a tax return in your name, hoping to claim your refund. Always guard your personal data, especially your Social Security number (SSN). You can also apply to the IRS for an Identity Protection Personal Identification Number (IP PIN). To succeed in their efforts, identity thieves would have to know your unique IP PIN in addition to your SSN and other information. And watch for signs that your identity has been compromised, such as the IRS rejecting your online return, saying that a tax return associated with your SSN has already been filed. If this happens, you can file IRS Form 14039 – Identity Theft Affidavit.

“Ghost” tax preparers – These individuals aren’t supernatural, but their actions can be pretty scary. A ghost preparer may finish your tax return but won’t sign it or provide a Preparer Tax Identification Number (PITN). This is a huge red flag, possibly indicating any number of bad actions, such as using fake information to generate a larger refund, and then charging you a fee based on that refund, or even worse, outright stealing the fee you’ve paid and then disappearing. Don’t sign your return until your preparer has also signed it and included their PTIN. And check your own return to make sure everything seems correct. To find a reputable tax preparer, ask your friends and relatives for referrals.

• “Phishing” emails claiming to be from IRS – You might receive emails that claim to be from the IRS but that come from scammers. These “phishing” emails might contain messages saying, “Your account or tax return is locked or restricted,” or, “You’re eligible to receive a tax refund.” Or the subject line of the email might contain a phrase such as “Automatic Income Tax Reminder” or “Electronic Tax Return Reminder.” These emails may contain links to a website that appears to be that of the IRS, but if you follow these links, you will be asked to open files that contain malware, which could give the scammer remote access to your computer and your personal information. But the IRS does not send unsolicited emails to taxpayers, it won’t discuss tax account information with you via email, and it won’t use emails to solicit sensitive financial and personal information.

Threatening phone calls – Tax scammers may call you, posing as IRS employees and demanding payment for back taxes, penalties or fees that you don’t owe. In reality, the IRS won’t call you if you owe taxes without first sending you a bill in the mail. Furthermore, the IRS will neither require that you pay your taxes a certain way, such as with a prepaid debit card, nor ask for your credit or debit card numbers over the phone.

It’s unfortunate that tax scammers are hard at work, but by staying vigilant and getting professional help if you need it, you can help protect yourself from being scammed – this year and every year.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Edward Jones, Member SIPC

Article Submitted by:

Susie Sanders, Financial Advisor, Edward Jones

802 E. 1st Street, Suite 2, Port Angeles WA


Todd E. Tidball, Financial Advisor, Edward Jones

18887 Highway 305, Suite 100, Poulsbo, WA


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