With the 2017 tax season approaching, fraudsters have already begun targeting taxpayers and businesses.

The IRS is warning all taxpayers and businesses to be suspicious of any communication or request that seems out of the ordinary. Specific scams include fraudulent phone calls, email phishing, and stealing W-2 information—and there are steps taxpayers can take to avoid them.

Phone Scam Continues to Target Taxpayers

A phone scam that involves fraudsters posing as IRS employees has been active for a few years but continues to trick taxpayers.

Here’s how it works: A scammer claims to be an IRS employee and tells the taxpayer that he or she owes money to the IRS and that a prompt payment must be paid via wire transfer or gift card. In many cases, the fraudster threatens the victim with arrest or deportation and typically uses aggressive speech to coerce the victim into paying the amount.

Warning Signs

• The IRS will never initiate contact by phone, email, or text message.
• The IRS will generally first send a letter if a taxpayer owes taxes.
• The IRS will never call to demand an immediate payment through gift card or wire transfer.
• The IRS will never threaten arrest or deportation.

Phishing Scam Targets Email Users

A new phishing scheme specifically targets Hotmail users by sending an email with the following subject: Internal Revenue Service Email No. XXXX ǀ We’re processing your request soon ǀ XXXXX-XXXXXXX. The email then directs the victim to a fake page that asks for personal information.

This particular scam has been shut down, but users should be aware that other scams similar to this one could pop up over the course of the 2017 tax season. It also serves as a reminder not to trust emails that appear to be from the IRS.

W-2 Scam Targets Payroll Personnel

A particularly harmful scam involves a fraudster who pretends to be a company’s CEO or chief operating officer and requests via email sensitive W-2 information from payroll personnel via email. These emails may look authentic, but they’re created using business email compromise (BEC) or business email spoofing (BES).

Because of the emails’ perceived legitimacy, personnel unknowingly forward sensitive information—such as employees’ names, addresses, social security numbers, income, and withholding to criminals. Those criminals then use the information to file fraudulent returns, creating a serious identify theft issue for taxpayers with compromised data.

How to Protect Yourself

Be Suspicious of Emails, Phone Calls, or Texts from the IRS

The IRS doesn’t initiate contact with taxpayers by phone, email, or text message. If you receive an unsolicited email claiming to be from the IRS, you can report it to phishing@irs.gov.

Don’t Trust Emails Asking for Information

Criminals often pose as someone a taxpayer trusts—such as an organization or tax preparer—and ask for personal information, money, and passwords. A best practice is to always call the sender if an email or request seems unusual.

Don’t Click on the Link

Be suspicious of emails from unknown senders or emails that look familiar but don’t seem right. Fraudsters may send emails asking recipients to open attachments or click on links that redirect to a fake website in hopes of stealing sensitive information.

Never click on a link or open an attachment in an email sent from a suspicious account. If there are any doubts as to the legitimacy of the link or sender, go directly to the website instead.

Check the URL Before Clicking

An email sender may send a link that at first glance looks correct—irs.gov, for example—but when clicked, the link takes the user to a fraudulent website, such as irs.gov/fakewebsitedonotclick.com.

A good practice is to hover over a link to view a pop-up of the actual URL and make sure it’s legitimate.

Monitor Your Tax Record

The IRS has a new online tool that allows you to monitor your tax account.

You do have to register and pass the validation; however, due to stringent identity theft protections at the IRS, only about half of people who register pass this validation. Once you’re authenticated, there are two benefits:

• You’ll be able to tell if someone has filed a fraudulent return using your information.
• You can obtain transcripts to see if the IRS believes you owe any tax.

IRS Identity Theft Affidavit

If your identity has been stolen, through breeches at Equifax, Yahoo, or Home Depot, for example, your risk of tax identity theft increases. You may want to file an Identity Theft Affidavit, Federal Form 14039, which increases the security of your account with the IRS.

For any monetary losses due to an IRS-related incident, you can report it to the Treasury Inspector General Administration and file a complaint with the Federal Trade Commission.

We’re Here to Help

The risk of tax identity theft, whether a social security number or employer identification number, is real. For more information or in the event of tax identity theft, contact your Moss Adams professional, who can also assist you in the preparation of an Identity Theft Affidavit if your identity has already been stolen.