Financial Safety

Tax Season Security Tips And How To Recognize Potential Tax Scams

Words by Abbie Dyer on Feb 4, 2022 1:30:00 PM


Each year, the Internal Revenue Service (IRS) warns taxpayers to be on the lookout for scams and potential fraud. Tax time is prime season for criminals who hope to gain money or personal information from unsuspecting people. Scams often increase during this time of year and it’s important to be alert and vigilant.


Fraudsters know that if they claim to be from a reliable source, like the IRS, that people are more likely to comply with a request. Scammers and online thieves often use a sense of urgency or make a threat to try to scare their victims into handing over money or information. So, it’s important to stop, think, ask questions, and use caution if anyone asks your personal information.


To help you stay safe during tax season, check out these security tips from the Lake Trust Security Team and information on how to identify the warning signs of a potential scam.


Review Your Emails Carefully


If you get an email from the IRS (or anyone else) asking for sensitive personal or financial information, this is most likely a phishing scam. Phishing emails may include malicious links or attachments infected with a virus or malware. If you click these links or open an infected attachment, you could compromise your device. These emails may use threatening language or a sense of urgency to try to get you to act.


The IRS and other government agencies do not contact people by email, phone, or text message. They will always contact you through the mail first if they need to speak with you. If you get an email from the IRS, U.S. Treasury, or other tax-related company that you suspect is fake, report it to and delete the email.


Remember that legitimate companies will never ask you for personal information, like your Social Security number, credit card information, account numbers, etc., via email. And under no circumstance should you ever share your Online Banking or other online account login information with another individual.


Check out our tips on how to spot a fraudulent email for additional information on common email scams.


Verify Who Is On The Phone


For this scheme, scammers call potential victims and may pretend to be an IRS agent by using a fake name or phony employee ID number. They may inform you that you owe back taxes and demand immediate payment. Then they’ll ask you to send the payment in the form of a prepaid debit card, gift card, or wire transfer. If you don't cooperate, the criminal may threaten to have you arrested. 


The IRS NEVER asks for payment by prepaid debit card, gift card, or wire transfer. If you do owe money to the IRS, they will always contact you by mail first and ask you to make your federal tax payment to the U.S. Treasury. If you receive a letter from the IRS, contact your tax preparer and work with them on next steps.


Be Skeptical Of Unexpected Tax Refunds


If something sounds too good to be true, then it probably is. Criminals sometimes contact potential victims and claim that there’s a tax refund coming your way. They'll tell you that they are sending a check and ask for your personal information, like address, email, or bank account information, so they can send you the funds.


The IRS does not give out surprise or unexpected refunds. You will know if you should expect a refund and the exact amount of this refund when you file your taxes. Sharing your information with an untrustworthy source could cause financial harm or lead to identity theft.


Other Helpful Resources


The IRS website1 is a great resource to check for the latest fraud/scam information and security tips to keep in mind when filing your taxes. The Consumer Financial Protection Bureau1 and the Federal Trade Commission1 are additional government agencies that regularly post security tips, alerts, and articles dedicated to help people keep their financial and personal information safe.


In addition to looking out for potential scams, it’s also important to protect your devices and online accounts. Keep your phone, computer, or tablet up to date with the latest software and security updates. If your online accounts offer multi-factor authentication, it’s a good idea to enable this option. You can learn more about how to keep your online accounts secure on our blog.


Trust Your Intuition


Criminals are masters of manipulation. They play to your emotions to make their victims feel frightened or confused. Scammers know that when you're emotional you're likely to overlook reason, and that's why they're often successful in getting money or information out of their victims.


Remember to trust your intuition. If a situation doesn’t feel right, do some research and ask questions. Stopping fraud often starts with you.

SEE ALSO: 5 Common Scams That Play Off Your Common Sense 11 Smart Ideas To Make The Most Of Your Tax Refund


1Third party website. Lake Trust Credit Union is not responsible for the content, availability, security or compliance of any linked third party websites. In addition, the site's privacy policies may differ from those of Lake Trust.


This article was originally published on April 8, 2015 and has been updated recently to reflect new information and additional security tips.


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