The countdown to Tax Day is on! This year, the IRS has moved the deadline for filing 2020 federal income tax returns from April 15 to May 17, 2021, giving taxpayers extra time to file their 2020 returns.
However, more time to file also means more time for scammers to carry out last-minute tax-related schemes. With the tax deadline approaching, it's important to stay on guard and watch out for suspicious activity.
Here's a look at the signs of common last-minute tax scams and how to avoid them.
Tax-related Identity Theft
Tax-related identity theft happens when someone uses your personal information (like your Social Security number) to file a fraudulent return in an attempt to claim your refund. You may not find out that your identity has been stolen until your tax return is rejected by the IRS because someone has already filed in your name.
How to protect yourself: Even with the new tax deadline, try to file your tax return as early as you can. When you file early in the season, you'll increase the chances of beating criminals to the punch and protect yourself from fraud.
Fake IRS Emails
Scammers have long posed as the IRS to trick taxpayers into providing their personal and financial information. In a recent scam, fraudsters are impersonating the IRS in emails targeting people with “.edu" addresses, including students and university staff members. The email will prompt you to check on the status of your refund and ask for sensitive information like your Social Security number, date of birth, driver's license number and electronic tax filing PIN. Although the email may appear to come from the IRS, it's a scam.
How to protect yourself: Remember that the IRS will never initiate contact with you via email. You shouldn't click the link inside the email, but you can report it to the IRS by forwarding it as an attachment to phishing@irs.gov. If you do need to check the status of your refund, only use the IRS “Where's My Refund" tool.
Tax Return Text Scams
Even after you finish filing your taxes, scammers will still be hard at work trying to steal your personal information and refund. Watch out for a new IRS imposter text scam that claims your federal tax return was rejected. The text will ask you to click on a link in an attempt to capture your personal information, putting you at risk of tax identity theft.
How to protect yourself: The IRS primarily communicates by mail and will never send you text messages about your tax return. If you receive a text like this, do not respond or click on any links. The IRS asks people to forward the IRS tax scam to (202) 552-1226.
Unexpected Tax Forms
Unemployment fraud has been an ongoing problem for states throughout the COVID-19 pandemic, and it's continuing to cause complications during tax season. Criminals are using stolen identities to apply for unemployment benefits and collect funds. Many people don't realize their identity has been used for unemployment fraud until tax season rolls around and they receive an unexpected tax form in the mail.
How to protect yourself: If you receive mail from a government agency about an unemployment claim or an IRS Form 1099-G and you didn't file for benefits or collect funds, don't ignore it. You may be a victim of unemployment fraud. Report the fraud to the state agency and request a corrected Form 1099-G. Unemployment fraud can lead to larger issues related to identity theft. Be sure to keep a close eye on your accounts and credit reports to spot further suspicious activity. You may also consider placing a freeze on your credit, which will prevent anyone from accessing your credit reports. Another option is placing a fraud alert on your credit reports, which will prompt creditors to verify your identity when checking your credit.
How to protect yourself: If you receive mail from a government agency about an unemployment claim or an IRS Form 1099-G and you didn't file for benefits or collect funds, don't ignore it. You may be a victim of unemployment fraud. Report the fraud to the state agency and request a corrected Form 1099-G.
Unemployment fraud can lead to larger issues related to identity theft. Be sure to keep a close eye on your accounts and credit reports to spot further suspicious activity. You may also consider placing a freeze on your credit, which will prevent anyone from accessing your credit reports. Another option is placing a fraud alert on your credit reports, which will prompt creditors to verify your identity when checking your credit.
Stay vigilant against tax scams
Tax scams take on a variety of forms and happen year-round. Continue to be alert and stay informed about the latest scams to avoid becoming a victim.
Wright-Patt Credit Union (WPCU) is here to help you protect your personal and financial information from fraud. For more fraud prevention tips, tools and resources, visit WPCU.coop/StopFraud.
The information contained in this web page is for education and informational purposes only and does not constitute professional advice. The information provided is subjective and you should always do your own research before making decisions. While reasonable efforts are made to include accurate and up-to-date information, Wright-Patt Credit Union makes no warranties or representations of any kind concerning the accuracy, timeliness or suitability of the information provided for any purpose. Validity of the content is not guaranteed, and you are strongly urged to consult a professional or other authority in the appropriate field, such as a tax professional, before acting on any of the content.