The Internal Revenue Service IRS, together with its Security Summit partners from state tax agencies and the national tax industry, is actively encouraging both individual taxpayers and tax professionals to be extra cautious in protecting their financial and tax information during the holiday season. This time of year is particularly critical as it poses an increased risk of identity theft.
Criminals are more aggressive in their efforts to trick individuals into revealing their sensitive personal data, often through deceptive means like emails, text messages, and social media interactions. Such information is highly valuable to identity thieves, who may use it to file fraudulent tax returns and unlawfully claim refunds.
IRS commissioner highlights national tax security awareness week for protection against identity theft
IRS Commissioner Danny Werfel has stressed the importance of this week dedicated to security, highlighting it as a time to reinforce strategies for both taxpayers and tax professionals to defend themselves against the constantly evolving tactics of identity theft that target tax and other financial data. The Security Summit, a joint endeavor between the IRS, state authorities, and the private-sector tax community, is focused on the protection of taxpayers and the wider tax community.
Ensuring the safety of taxpayers is a primary concern for the IRS, and National Tax Security Awareness Week is pivotal in providing essential information to taxpayers, helping them to stay one step ahead of identity thieves.
To raise awareness, the IRS and its collaborators are launching the 8th National Tax Security Awareness Week, starting on November 27, 2023. This week-long campaign is dedicated to educating both taxpayers and tax professionals about effective methods to avoid scams and safeguard their personal and sensitive information.
Peter Barca, President of the Federation of Tax Administrators Board of Trustees and Secretary of the Wisconsin Department of Revenue, has lauded the progress made by the Security Summit in protecting taxpayers across the country. Despite these strides, Barca acknowledges the relentless evolution of identity theft tactics. He calls for heightened vigilance among taxpayers, businesses, and tax professionals, highlighting the crucial role of National Tax Security Awareness Week in offering guidance to confront these evolving threats.
Alert on common identity theft scams
The IRS is warning taxpayers about a notable increase in fraudulent activities, particularly through email and text message scams that falsely promise tax refunds or offer to resolve tax issues. These scams are especially prevalent during the holiday season. A common scam involves bogus claims about a third round of Economic Impact Payments or stimulus checks.
The IRS has reported frequent complaints about this scam, which typically includes a deceptive URL link leading to a phishing site designed to harvest sensitive taxpayer information. It is vital to clarify that no new stimulus checks are being issued. Nevertheless, there may be opportunities to claim refunds related to previously unclaimed checks. Individuals who did not receive these checks or received an incorrect amount can file a tax return and utilize the Recovery Rebate Credit. Importantly, there are no special links or websites that expedite this process.
Moreover, the IRS is often alerted about emails encouraging individuals to “Claim your tax refund online” or text messages indicating problems with a specific tax return. These deceptive messages often feature grammatical errors and strange wording but consistently seek to entice recipients into clicking on links provided. It is crucial to remember that the IRS never initiates contact with taxpayers through email, text messages, or social media to request personal or financial information. For your protection, it is advisable to avoid clicking on links from unverified sources. If you come across such a dubious email, reporting it is recommended.
Warning about gift card scams
The IRS is also emphasizing caution regarding scams involving tax-related gift card transactions. It is essential to understand that the IRS does not accept gift cards as a form of payment and will never contact taxpayers with threats of lawsuits, arrests, or deportation related to gift card payments.
Additionally, the IRS advises individuals to be wary of online sellers who accept only gift cards, money transfers (like Western Union), or cryptocurrency as payment. Transactions through these methods are difficult to trace and reverse. Fraudsters often persuade individuals to use these payment methods for settling tax bills, claiming swift transactions, only to abscond with the money.
Guidelines for safe charitable giving
With the increase in requests for charitable donations during the holiday season, and particularly on Giving Tuesday (November 28, 2023), it is vital to be cautious of potential scams. Here are some guidelines to ensure that your donations are safely reaching their intended beneficiaries:
- Beware of Charity Scams: Be vigilant against fake charity scams that may arise through phone calls, social media, text messages, or emails. Scammers can disguise their caller ID or email address to mimic legitimate charities. Always verify the charity’s name, website, and physical address independently. Avoid clicking on links in emails—instead, enter the charity’s name or website address directly into your browser.
- Choose Secure Donation Methods: When donating by check or credit card, ensure the transaction is secure. Be cautious about sending money through text messages or apps like Venmo without verifying the charity’s authenticity and contact details. If you prefer not to donate online or via text, many organizations provide forms that can be mailed along with a check. It is advisable never to send cash through the mail.
- Take Time to Reflect: Scammers often create a sense of urgency to pressure for immediate donations. If you have doubts about the legitimacy of a charity or feel pressured, take a moment to think it over. When responding to a solicitation, either on the phone or in person, consider asking for contact information to follow up later.
- Do Your Homework: Before committing to a donation, thoroughly research the charity’s background. Media outlets often list the largest charities in the US, providing insights into their revenues and fundraising efficiency. Confirm the charitable status of the organization through the IRS website using their online search tool. Remember, some entities, such as churches, synagogues, and mosques, may not be listed; in such cases, feel free to request additional information.
- Understand Tax Deduction Rules: For federal income tax purposes, only donations made to qualified tax-exempt charitable organizations are deductible. Contributions to individuals are not tax-deductible. When donating outside recognized charitable organizations, exercise caution to avoid potential scams.
- Be Prudent in Sharing Information: Scammers often aim to acquire both money and personal information. Avoid disclosing sensitive details like your Social Security number or personal identification numbers (PINs). Only provide bank or credit card information after thoroughly verifying the charity’s credibility.
- Keep Detailed Records: Maintain comprehensive records of all donations for tax purposes. Requesting documentation from the charity is an effective way to gauge its legitimacy—if they are reluctant to provide a receipt, consider this a warning sign.
Additional resources for safety
In light of the rise in texting scams, protect yourself by referring to security guidelines specific to your mobile phone model. The Federal Communications Commission’s Smartphone Security Checker offers tailored recommendations for enhancing your phone’s security.
Stay informed about prevalent tax-related scams by following official IRS communications. You can keep up with the latest scam alerts by following @IRSnews on social media platforms like YouTube and other official IRS channels.
For detailed guidance on preventing and responding to identity theft, the IRS provides a comprehensive Taxpayer Guide to Identity Theft on its website. This valuable resource offers insights into recognizing signs of identity theft and steps to take if you suspect you are a victim.