An early warning for tax season scams

Before you know it, the IRS will be releasing its 2015 version of the Dirty Dozen Tax scams. This list (here's the one for 2014) contains the perennial ruses the IRS feels compelled to warn Americans about. They include phishing, tax preparer fraud, ID theft by using someone's Social Security number to file bogus tax returns claiming big tax refunds and impersonation of IRS agents. Here are a few of the most pervasive scams and what to do if you think you're being targeted.

Email phishing

These emails look like official government correspondence and include a demand to "update your IRS e-file immediately." These messages include addresses like USAgov or IRSgov, but never with the dot in the name. These emails contain a link to a bogus website that looks like the official IRS site. If you get one of these messages, don't respond to it and don't click on the links. Instead, forward it to the IRS at phishing@irs.gov.

ID theft and fraud

This scam is at the top of the IRS list. It happens when someone uses your personal information, including your Social Security number, to fraudulently file a tax return and a claim a refund. This has been so broadly used that the IRS now has a special section of its site dedicated to this problem. Victims should contact the IRS Identity Protection Specialized Unit online or by calling 800-908-4490.

IRS impersonation

One of the newer tricks involves scammers making surprise phone calls to taxpayers and claiming to work for the IRS. Here's what they're doing, according to a recent report from the Treasury Inspector General for Tax Administration (TIGTA).

Taxpayers say they receive calls from these individuals demanding money for unpaid taxes. During the first eight months of this year, more than 90,000 complaints about this practice were lodged with the IRS and the TIGTA. So far, over 1,100 folks have been scammed out of about $5 million.

The scam is simple and preys on the public's trust and their fear of the IRS. The scammers are persistent, calling repeatedly and trying new tactics to secure payment. To appear convincing, they use fake names, bogus IRS badge numbers and can often recite the last four digits of the target's Social Security number. They also use technology that can spoof the IRS toll-free number on caller ID, which makes it appear that the IRS is really calling. Finally, fake emails are sometimes sent referencing the bogus calls.

Despite how elaborate all that sounds, you can take some simple steps to thwart these scammers if they try calling you. The IRS provides five easy ways to identify a phone scammer because it says it will never ever take any of the following actions:

1) Call you about a tax deficiency without first sending an official notice in the mail. These notices include a reference number, which you should always ask for if someone claiming to be from the IRS calls.

2) Demand that the taxpayer pay any amount immediately. The IRS always sends a Notice of Tax Due, which includes the option to agree or disagree. If you really do owe taxes, you may get the option to pay in installments or to submit a request for an Offer in Compromise. Simply put, if a person claiming to be from the IRS calls demanding immediate and full payment of a tax debt, that's a big red flag.

3) Require a taxpayer to use a specific method to pay the tax, such as a debit card. The IRS accepts payment in a variety of options, including checks, wire transfers, electronic funds transfers and credit cards.

4) Ask for credit card or debit card numbers over the phone.

5) Make threats to report you to local police or law enforcement to have you arrested for nonpayment of taxes. Only after an extended period of time, and in extreme cases, would the IRS refer your case to a federal law enforcement agency.

Folks who receive suspicious calls from anyone claiming to be from the IRS or believe they've fallen victim to this scam are urged to report it to the TIGTA by calling 800-366-4484.

  • Ray Martin

    View all articles by Ray Martin on CBS MoneyWatch»
    Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS Moneywatch.com and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.