Tax scams don't all look the same, but they are all intended to steal your money. Most fall into one of several categories of illicit acts, including phone scams, phishing and tax provider scams. Help yourself avoid these scams by knowing what kinds are out there and taking steps to keep your money safe.
Don't engage with phone scammers
The caller knows your name and maybe your address, too. He says he's from the Internal Revenue Service (IRS) and tells you that you owe back taxes and must pay up now or face arrest or deportation.
Or, sometimes, the scammer says the IRS owes you a refund and then asks for your financial information. Aggressive phone calls like these are at the top of the IRS' "Dirty Dozen" tax scam list. Remember—the IRS will never:
- Demand payment in a phone call
- Threaten to bring in law enforcement agencies
- Ask for credit or debit card numbers by phone
Avoid these scams by remaining calm and vigilant. The key is to get off the phone without providing any personal information, then report the incident to local police, the Federal Trade Commission or the Treasury Inspector General for Tax Administration at 1-800-366-4484.
One way to avoid phone scams is to let voicemail pick up calls from people you don't know, especially during tax season. Elizabeth Beristain, writer and teacher in the San Francisco Bay Area, uses this technique.
Last year, Beristain received several threatening, tax-scam calls on her voice mail, but simply opted not to return them. "It's easier to recognize a scam on your voice mail," Beristain says. "You aren't put in the position of having to respond immediately."
Don't respond to emails seeking personal or financial information
If a phony IRS contact comes via email, it's called phishing. The newest twist on phishing is a request that says it comes from the IRS asking you to update your IRS e-file or profile.
The term phishing also refers to websites designed to steal your personal information, like Social Security numbers. Criminals can use this information to steal your identity or your money. With a Social Security number, they can file a tax return in your name and pocket the refund.
Avoid phishing scams by taking these precautions:
- Never open emails claiming to be from the IRS. The agency won’t send emails out of the blue about your taxes or refunds.
- Stay away from websites that look suspicious or promise results that are too good to be true.
- Never give out your Social Security number or any financial information in response to an email request.
Use reputable tax preparers and websites
Not everyone who offers to do your tax return is a legitimate tax preparer. Phony tax preparers and tax preparation websites are interested only in stealing your money and financial information.
The IRS requires tax preparers to obtain an annual Preparer Tax Identification Number (PTIN) before they are authorized to prepare federal tax returns. If someone doesn't have a PTIN, don't allow him or her to do your tax return. The IRS also has a Directory of Federal Tax Return Preparers you can use to verify that a tax preparer is credentialed.
Ideally, use a tax preparer you know and trust or a tax preparation website that has been around awhile and has a good reputation. If you are solicited by someone new, be wary if the tax preparer:
- Bases fees on the amount of your refund
- Suggests you have your refund sent to him
- Cannot file electronic returns
- Doesn’t sign your return and include a PTIN
Steer clear of tax preparers who promise too much
Some unscrupulous tax preparers lure taxpayers with such tactics as:
- Promising to hide income in off-shore companies
- Claiming sky-high exemptions
- Using deductions you've never used before and don't understand
Remember, if a tax preparer files a fraudulent return in your name, the IRS can assess penalties and interest, and you might even face criminal charges.
Avoid any tax preparer who asks you to sign a blank return or assures you of a big refund before even learning the details of your financial situation. Walk the other way if he suggests falsifying documents or bending the law, like offering to "correct" a 1099 form by reporting your income as zero.
With TurboTax Live Full Service, a local expert matched to your unique situation will do your taxes for you start to finish. Or, get unlimited help and advice from tax experts while you do your taxes with TurboTax Live Assisted.
And if you want to file your own taxes, you can still feel confident you'll do them right with TurboTax as we guide you step by step. No matter which way you file, we guarantee 100% accuracy and your maximum refund.
FAQs
Identity thieves continue their tax-time fraud exploits on two fronts: tax identity fraud and IRS imposter scams. By making informed choices when sharing your personal information, by filing your tax returns as early as possible and by verifying that you're speaking to the IRS, you can thwart these identity thieves.
What are the warning signs of tax scams? ›
You Get a Phone Call From the IRS
Officially, the IRS website says it does not: "Initiate contact with taxpayers by email, text or social media to request personal or financial information; call taxpayers with threats of lawsuits or arrests; or call, email or text to request taxpayers' Identity Protection PINs."
Is JustAnswer part of TurboTax? ›
Please note that this is JustAnswer, an independent Q&A service that is not affiliated with TurboTax in anyway.
What three things will the IRS never do? ›
3 Things the IRS Won't Do
- Spearphishing attacks.
- Fake charities.
- False fuel tax credit claims.
- Scammers offering to set up an online account.
- Promoters pushing questionable Employee Retention Credit Claims.
An Identity Protection PIN (IP PIN) is a six-digit number that prevents someone else from filing a tax return using your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN). The IP PIN is known only to you and the IRS.
Is tax avoidance illegal? ›
Tax avoidance is perfectly legal and encouraged by the IRS, but tax evasion is against the law. Classify the tactics below as examples of Tax Avoidance or Tax Evasion by clicking on the correct answer. To assess your answers, click the Check My Answers button at the bottom of the page.
What is a red flag from IRS? ›
Not reporting all of your income is an easy-to-avoid red flag that can lead to an audit. Taking excessive business tax deductions and mixing business and personal expenses can lead to an audit. The IRS mostly audits tax returns of those earning more than $200,000 and corporations with more than $10 million in assets.
Does TurboTax ask for your Social Security number? ›
You cannot file taxes (in the US) in any way, shape or form (paper, accountant, desktop software, online, TurboTax or anyone else) without providing your social security number.
What is the number for 1 800 446 8848? ›
Alternatively, you can reach out directly to the QuickBooks Enterprise support number at 1-800-INTUIT(800 446-8848) or (818-602-4544)(No Wait) for immediate help.
Is TurboTax safe to use for taxes? ›
100% Accurate Expert-Approved Guarantee: If you pay an IRS or state penalty (or interest) because of an error that a TurboTax tax expert or CPA made while providing topic-specific tax advice, a section review, or acting as a signed preparer for your return, we'll pay you the penalty and interest.
Certain retirement accounts: While the IRS can levy some retirement accounts, such as IRAs and 401(k) plans, they generally cannot touch funds in retirement accounts that have specific legal protections, like certain pension plans and annuities.
What is the new IRS question that must be answered? ›
The Internal Revenue Service reminds taxpayers they must answer the digital asset question and report all digital asset related income when they file their 2023 federal income tax return.
Who does the IRS go after most? ›
The odds rise for those reporting income over $200,000 and, according to research from Syracuse University published in January, millionaires are the most likely to be audited out of any income bracket. Declaring little or no income at all is a red flag, too, though.
What companies does TurboTax own? ›
Intuit — which also owns QuickBooks, Mint, Credit Karma and Mailchimp — has spent decades lobbying against free, government-sponsored tax filing services.
What company is behind TurboTax? ›
Intuit Consumer Tax Group is based in San Diego, California. Intuit Corporation, which owns Intuit, is headquartered in Mountain View, California. There are a number of different versions, including TurboTax Deluxe, TurboTax Premier, etc. TurboTax is available for both federal and state income tax returns.
Which forms are not included in TurboTax? ›
Because few taxpayers need the following IRS forms, TurboTax doesn't include:
- Form 709 United States Gift (and Generation-Skipping Transfer) Tax Return.
- Form 970 Application to Use LIFO Inventory Method.
- Form 1040-NR U.S. Nonresident Alien Tax Return. ...
- Form 1116 Schedule C.
TurboTax is only licensed for personal use, and it is not compliant with IRS regulations for paid preparers. Intuit offers ProSeries, ProConnect, and Lacerte Tax software, which are IRS-compliant for tax professionals who are filing multiple returns.
