How to spot and report an IRS tax scam

The Internal Revenue Service (IRS) reported that in 2023 alone, $5.5 billion was lost to tax-fraud schemes. With W-2s and other tax forms full of personal information, it’s easy for your private data to fall into the wrong hands. 

Whether they’re tricking you into clicking on malicious links, or impersonating a tax professional via social engineering, fraudsters are on the move, looking to steal your money or gain access to your accounts.  

Let’s uncover the top IRS tax scams to look out for this year, and learn how to report a scam if you believe you’ve encountered one. 

Types of tax scams to look out for 

From unsavory social media advice to criminals posing as tax preparers and IRS staff, fraudsters target unsuspecting individuals in a variety of ways. Here are the top tax scams the IRS wants you to be aware of. 

Bad tax advice on social media  

Social media influencers may lead you to believe that tax professionals are keeping “secret” tax credits from you, resulting in you missing out on larger tax refunds. They may even encourage you to lie on your tax forms, falsely claiming fuel tax credits, sick and family leave credits, and more.  

These influencers then put you in touch with scammers to help you file your taxes, misleading you on applicable credits and promising you big returns, instead gaining access to your personal information and accounts. Remember, taxpayers who intentionally file forms with false or fraudulent information can face serious consequences, including criminal penalties. It’s the taxpayer’s duty to confirm that information on their tax forms is accurate and honest. 

IRS impersonators  

Perhaps one of the most nefarious scams, IRS impersonators harass taxpayers with threatening emails, calls, voicemails, and even in-person, trying to steal your money. They’ll claim that you owe back taxes or that there’s an unresolved problem with your tax return, demanding you pay immediately, “or else.”  

These scammers are even known to manipulate, or “spoof,” your caller ID to make their call look official. Often, these fraudsters will threaten to revoke your license, arrest, or even deport the taxpayer. They will do anything they can to get your money or your account information fast.  

It’s important to remember that the IRS will first contact you by regular mail through the United States Postal Service. Additionally, they will never ask you to pay taxes with a prepaid debit card, wire transfer, or cashier’s check. 

Tax debt settlement or relief services 

Owing taxes can be a stressful situation for many people, and fraudsters are known to strike at the most vulnerable moments. In tax settlement and relief scams, criminals will pressure you to use their services to settle taxes you owe. They promise to relieve your tax debt for “pennies-on-the-dollar,” and often push you to pay for their services immediately. 

In many cases, taxpayers don’t meet the requirements for an authentic Offer in Compromise, yet scammers will charge excessive fees in exchange for information taxpayers can easily obtain themselves. 

If you owe a large tax bill, don’t let a fraudster panic you into payment. Setting up an Installment Agreement with the IRS is quick and easy. This option works well for individuals who owe a substantial amount of money, breaking the tax bill into affordable monthly payments over a longer period of time. 

Reporting a suspected tax scam 

If you suspect you’ve been a victim of a tax scam, or have been in contact with an IRS impersonator or fraudulent tax preparer, report your concerns to the IRS immediately.  

Report an IRS impersonator 

The IRS will first contact you through regular U.S. mail delivered by the U.S. Postal Service. An IRS official will never leave threatening voicemails, request payment via social media, threaten to call local law enforcement or immigration officials, or revoke your license or immigration status.  

Follow the steps on the IRS website to report a phone call, social media message, email or text message.  

Report a stolen Social Security number 

If your Social Security number (SSN) or individual tax identification number (ITIN) was stolen, immediately report it to IdentityTheft.gov. If your SSN or ITIN was used by someone else to file taxes, the IRS will send a notice that your tax return was rejected – immediately call the number on this notice.  

Then, complete Form 14039, Identity Theft Affidavit, and submit the form online.  

Report a tax scam 

Most scams can be reported with Form 14242, Report Suspected Abusive Tax Promotions or Preparers. The form can be submitted online. 

Report a fraudulent tax preparer 

To report a tax preparer who filed a fraudulent return, use Form 14157, Return Preparer Complaint, and submit the form online.  

If you’ve received a suspicious communication from the IRS, please call Empeople Credit Union, or visit an IRS walk-in center to verify the legitimacy of the communication. The Empeople fraud department is here to help. Call us at (800) 338-6739 or send a secure message in digital banking.