Scammers pretending to be from the IRS continue to target taxpayers. These scams take many different forms. Among the most common are phone calls and fake emails. Thieves use the IRS name, logo or a fake website to try and steal money from taxpayers. Identity theft can also happen with such scams.
Taxpayers need to be cautious of phone calls or automated messages from scammers who claim to be from the IRS. These criminals often say the taxpayer owes money. They also demand immediate payment.
Scammers also lie to taxpayers and say they are due a refund. They do this to lure their victims into giving their bank account information over the phone. The IRS warns taxpayers not to fall for these scams.
Below are tips that will help avoid becoming a victim:
The IRS will NOT:
Call to demand immediate payment using specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS first mails a bill to taxpayers who owe taxes. If the IRS assigns a case to a Private Debt Collector (PCA), both the IRS and the authorized collection agency send a letter to the taxpayer. Payment is always to the United States Treasury.
Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
Demand payment of taxes without giving the taxpayer the opportunity to question or appeal the amount owed.
Ask for credit or debit card numbers over the phone.
If a taxpayer receives a fraudulent call, they should:
Report the incident to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" to the comments of your report.
If a taxpayer is not sure whether they owe any tax, they can view their tax account information on IRS.gov to find out.
The IRS does not initiate contact using social media or text message.
Avoid scams. The first contact normally comes in the mail.
An IRS phishing scam is an unsolicited, bogus email that claims to come from the IRS. The newest phishing scheme impersonates the IRS and the FBI as part of a ransomware scam to take computer data hostage. The scam email uses the emblems of both the IRS and the Federal Bureau of Investigation. It tries to entice users to select a “here” link to download a fake FBI questionnaire. Instead, the link downloads a certain type of malware called ransomware that prevents users from accessing data stored on their device unless they pay money to the scammers.
“This is a new twist on an old scheme,” said IRS Commissioner John Koskinen. “People should stay vigilant against email scams that try to impersonate the IRS and other agencies that try to lure you into clicking a link or opening an attachment. People with a tax issue won’t get their first contact from the IRS with a threatening email or phone call."
The IRS, state tax agencies and tax industries – working in partnership as the Security Summit – currently are conducting an awareness campaign called Don’t Take the Bait, that includes warning tax professionals about the various types of phishing scams, including ransomware.
Victims should not pay a ransom. Paying it further encourages the criminals, and frequently the scammers won’t provide the decryption key even after a ransom is paid.
The IRS does not use email, text messages or social media to discuss personal tax issues, such as those involving bills or refunds.
For taxpayers who get a ‘phishing’ email, the IRS offers this advice:
Don’t reply to the message.
Don’t give out personal or financial information.
Immediately report any ransomware attempt or attack to the FBI at the Internet Crime Complaint Center, www.IC3.gov
Forward the email to email@example.com. Then delete it.
Do not open any attachments or click on any links. They may have malicious code that will infect your computer.
More information on how to report phishing or phone scams is available on IRS.gov/phishing.
The IRS, state tax agencies and the tax industry urged tax professionals and businesses to beware of a recent increase in email scams targeting employee Forms W-2:The Form W-2 contains the employee’s name, address, Social Security number, income and withholdings. That information was used to file fraudulent tax returns, and it can be posted for sale on the Dark Net, where criminals also seek to profit from these thefts .
The W-2 scam – called a business email compromise or BEC – is one of the most dangerous phishing email schemes trending nationwide from a tax administration perspective. A business email compromise occurs when a cybercriminal is able to “spoof” or impersonate a company or organization executive’s email address and target a payroll, financial or human resources employee with a request.
For example, fraudsters will try to trick an employee to transfer funds into a specified account or request a list of all employees and their Forms W-2.
“These are incredibly tricky schemes that can be devastating to a tax professional or business,” said IRS Commissioner John Koskinen. “Cybercriminals target people with access to sensitive information, and they cleverly disguise their effort through an official-looking email request.”
The Federal Bureau of Investigation reported earlier this year that there has been a 1,300 percent increase in identified losses – with more than $3 billion in wire transfers – since January 2015. The FBI found that the culprits behind these scams are national and international organized crime groups who have targeted businesses and organizations in all 50 states and 100 countries worldwide.
During the 2016 filing season, the IRS first warned businesses that the scam had migrated to tax administration and scammers were using business email compromise tactics to obtain employees’ Forms W-2. The criminals were immediately filing fraudulent tax returns that could mirror the actual income received by employees – making the fraud more difficult to detect.
In 2017, the IRS saw the number of businesses, public schools, universities, tribal governments and nonprofits victimized by the W-2 scam increase to 200 from 50 in 2016. Those 200 victims translated into several hundred thousand employees whose sensitive data was stolen. In some cases, the criminals requested both the W-2 information and a wire transfer.
If the business or organization victimized by these attacks notifies the IRS, the IRS can take steps to help prevent employees from being victims of tax-related identity theft. However, because of the nature of these scams, many businesses and organizations did not realize for days, weeks or months that they had been scammed.
The IRS established a special email notification address specifically for businesses and organizations to report W-2 thefts: firstname.lastname@example.org. Be sure to include “W-2 scam” in the subject line and information about a point of contact in the body of the email.
Businesses and organizations that receive a suspect email but do not fall victim to the scam can forward it to the BEC to email@example.com, again with “W-2 scam” in the subject line.
Protecting Clients and Businesses from BECs
The IRS urges tax professionals to both beware of business email compromises as a threat to their own systems and to educate their clients about the existence of BEC scams. Employers, including tax practitioners, should review their policies for sending sensitive data such as W-2s or making wire transfers based solely on an email request.
Tax professionals should consider taking these steps:
Confirm requests for Forms W-2, wire transfers or any sensitive data exchanges verbally, using previously-known telephone numbers, not telephone numbers listed in the email.
Verify requests for location changes in vendor payments and require a secondary sign-off by company personnel.
Educate employees about this scam, particularly those with access to sensitive data such as W-2s or with authorization to make wire transfers.
Consult with an IT professional and follow these FBI recommended safeguards:
Create intrusion detection system rules that flag e-mails with extensions that are similar to company email. For example, legitimate e-mail of abc_company.com would flag fraudulent email of abc-company.com.
Create an email rule to flag email communications where the “reply” email address is different from the “from” email address shown.
Color code virtual correspondence so emails from employee/internal accounts are one color and emails from non-employee/external accounts are another.