SmartBanking Blog

IRS Impersonation Scams

One of the most common fraud schemes we see every year around this time is the IRS impersonation scam. This may add stress to an already stressful time of year, but the good news is that once you know what to look for, these scams become much easier to spot and avoid.

What is an IRS impersonation scam?

In this scam, fraudsters pretend to be from the Internal Revenue Service (IRS). They may contact you via phone, text, email, mail, or even direct message on social media. They usually claim there is something wrong with your tax return, that you owe back taxes, or that you are due a refund. They either say you need to pay what you owe immediately or face legal action, or they say that you must provide your information to receive your refund. They often sound convincing and may even spoof official websites, phone numbers, or email addresses.

How these scams usually work:

Scammers rely on urgency and fear to get you to act. You may receive a call saying you owe back taxes and must pay immediately, or that an officer will be on their way to your home. Some may rattle off personal information and ask you “verify” it. No matter what their tactic is, their end goal is to fluster you into giving them personal details or money.

Red flags to watch for

• Threats or urgency such as demands for immediate payment or threats of arrest.
• Unusual payment requests like asking for gift cards, wire transfers, or cryptocurrency.
• Unexpected contact through phone calls, texts, DMs, and more. The IRS typically initiates contact through the mail.
• Requests for sensitive information like Social Security numbers, bank details, or login credentials.

What the IRS will (and won’t!) do

• WILL send official letters through the mail for most communications.
• WILL NOT demand immediate payment over the phone.
• WILL NOT ask for payment via gift cards or prepaid debit cards
• WILL NOT threaten arrest or involve law enforcement without prior written notice.

How to protect yourself

Simple habits that work for most fraud prevention work in avoiding IRS impersonators. The first is to pause before you act. Never give into pressure or react quickly. Next, verify information independently. You can reach out to the IRS at their official contact to verify any claims. You can also choose to reach out to your dedicated tax professional if you have one. Never share your personal information, especially with unsolicited or unexpected callers or messages. Lastly, talk to your bank. If something feels off, your bank can help you assess the situation and may have resources to help you.

If you receive a suspicious call or message, don’t engage. Hang up, report as spam, and report the attempted scam to the appropriate entity. If you think you may have already shared information with a scammer, contact your bank right away.

Keeping your peace of mind during tax season isn’t easy, but by recognizing the signs of an IRS impersonator scam, you can protect your money and information from bad actors.