Tax season is just around the corner, and that means tax scammers are sharpening their swindling skills. You can get ahead of them by learning about their favorite (and most successful) techniques:

Phone Calls

Although each call may be slightly different, they all begin the same way—an unexpected caller who claims to represent a government agency. The agency’s name may even show on caller ID. You might get a prerecorded message that demands a call back or a caller may say you owe taxes, and if you don’t pay immediately, you risk arrest. In a recent twist, a caller may tell you your Social Security Number has been or will be suspended, and you need to confirm your number to reactivate it.

What You Should Know

  1. The Social Security Administration (SSA) will never threaten your benefits, and the Internal Revenue Service (IRS) will never threaten to bring in law enforcement.
  2. Never provide any information about yourself over the phone, even if the caller knows the last four digits of your Social Security Number and says they’re just verifying the number. Hang up.
  3. If you owe taxes, the IRS will mail you a bill first and will allow you to request a payment plan. True IRS agents won’t ask for your credit or debit card information or demand that you pay with gift cards or a wire transfer. And, they’ll always tell you to pay the U.S. Treasury—not someone else.

What You Can Do

If you’re not sure if you owe taxes, you can find out on the IRS website and see what payment options are available to you. You can also call both the IRS and SSA to verify whether or not what you’re being told is true.

Internal Revenue Service: 1-800-829-1040

Social Security Administration: 1-800-772-1213

Emails

Another common scam comes through an official-sounding email that supposedly comes from the IRS. Often, these “phishing” emails invite you to click a link for information about your tax return or refund. They may include a temporary password. The link will appear to lead to IRS.gov, but actually will send you to a fake website that tricks you into giving out personal information.

What You Should Know

  1. The IRS will never contact you by email, text message or social media.
  2. Fake IRS emails usually have eye-catching subject lines like “IRS Important Notice” or “IRS Taxpayer Notice” because they’re very effective at getting people to open them.
  3. The scammers may spoof the sender’s email address to make it look like it came from the IRS, and once opened, it may even have the official IRS logo.
  4. Clicking the link will download malware that infects your computer. From there, it’s easy for the scammer to gain access to your financial information.

What You Can Do

Don’t click! Report suspicious emails to phishing@irs.gov.

Tax Preparation

It’s easy to be tempted by promises of a big tax refund, and that’s what scammers are hoping. Fraudulent tax preparers may offer to charge a percentage of your refund for their fee. They’ll add information to your tax return like fake or exaggerated deductions or credits and may even change your income amount. By the time the IRS catches the false information, the scammer is long gone, but you’ll be left to pay the consequences—more taxes, interest, penalties and possibly criminal charges.

What You Should Know

  1. Legitimate tax preparers are required to sign your return and include their Preparer Tax Identification Number, but unethical preparers won’t include it.
  2. Scammers often require payment in cash, don’t provide a receipt and may divert your tax refund to their bank accounts.

What You Can Do

Review your tax return carefully to make sure it’s accurate and, if you’re due a refund, check to see that your bank’s routing number and your bank account number are correct on the final return.

You can find a qualified tax professional in your area by visiting the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

Identity Theft

If scammers get access to your Social Security Number and other key information, they can file a tax return in your name and get a refund. You might not know this has happened until you try to file a return yourself, only to have it rejected.

What You Should Know

  1. Check that the earnings reported on your Social Security statement (available at socialsecurity.gov/myaccount) match your actual earnings.
  2. You’re more likely to prevent scammers from filing a return before you if you file your return early.

What You Can Do

If the IRS has rejected your return or you’ve received a notice from them, you can call the Taxpayer Protection Program at 1-800-908-4490 for help. Keep in mind that they’ll probably ask you to prove your identity, so be ready with documents like your birth certificate, Social Security card and at least one previous tax return.

If you determine that you’ve become a victim of identity theft, the IRS suggests you:

  • contact the credit bureaus and your financial institutions
  • close any accounts opened without your permission
  • consider a credit freeze
  • file a complaint with the Federal Trade Commission (FTC)

More Tax and Scam Information

You can find step-by-step filing instructions and several IRS resources on Navy Federal’s Tax Center page. If you’d like to read more about scams and how you can protect your Navy Federal account, visit our Security Center.

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.