Indiana Attorney General Greg Zoeller is urging Hoosiers to file their taxes as soon as possible this year to avoid fraud.
Tax-related scams are growing in popularity, with fraudsters taking advantage of complicated tax processes and using fear tactics to victimize well-intentioned taxpayers.
Tax identity theft
The Federal Trade Commission (FTC) is designating this week, Jan. 25-29, as Tax Identity Theft Awareness week. Tax identity theft occurs when a criminal uses a legitimate taxpayer’s Social Security number to file a tax return.
“I’m recommending that all Hoosiers file their taxes as soon as they receive all of their forms to stay ahead of criminals,” Zoeller said. “Tax filing affects everyone and the process can be complicated, giving criminals plenty of avenues to confuse and defraud people. Unfortunately, these crimes are increasing as more of our personal information is used and stored online, and susceptible to data breaches. Everyone should be very wary when asked to give out their Social Security number.”
The Indiana Attorney General’s Office received 425 complaints about tax identity theft in 2015. The AG’s Identity Theft Unit works with the Indiana Department of Revenue (DOR) to combat this fraud and assist victims.
Zoeller said victims of tax identity theft may not realize they have been targeted until they attempt to file their taxes themselves and get denied. The best way to avoid this, he said, is by filing your taxes early and following these tips offered by the AG’s Office and the FTC:
- Use a secure Internet connection if you file electronically. Don’t use unsecure, publicly available Wi-Fi hotspots at places like coffee shops or a hotel lobby.
- Mail your tax return directly from the post office.
- Shred copies of your tax return, drafts or calculation sheets you no longer need.
- Remember the IRS won’t contact you by email, text or social media. If the IRS needs information, it will first contact you by mail.
- If someone emails you or calls you claiming to be from the IRS, forward the message to the IRS atphishing@irs.gov or call the IRS directly at 1-800-908-4490.
- Don’t give out your Social Security number (SSN) or Medicare number unless absolutely necessary. Ask why it’s needed, how it’s going to be used and how it will be stored.
- Get recommendations and research a tax preparer thoroughly before you hand over personal information. Ask how your documents will be stored, secured and consider whether you should take them back for safe keeping.
- Sign up for a free credit freeze to lock down your credit from criminals, and check your credit reports quarterly at AnnualCreditReport.com for any errors.
For more tips on preventing identity theft, visit www.IndianaConsumer.com/idtheft.
If you think you are a victim of tax identity theft, contact the IRS Identity Protection Specialized Unit at 1-800-908-4490 immediately as well as the Indiana Attorney General’s Office at 1-800-382-5516.
IRS impersonation scam
Zoeller said another serious threat during tax season is the Internal Revenue Service (IRS) impersonation scam.
In the IRS impersonation scam, criminals call consumers claiming to be with the IRS and demand immediate payment of past-due taxes. Scammers might threaten arrest and jail time if the payment is not received immediately, and usually request that the money be paid back though the purchase of pre-paid cards, such as GreenDot or ReloadIt.
The IRS impersonation scam targeted more Indiana residents in 2015 than any other scam reported to the Attorney General’s Office, with about 1,800 complaints filed and victims losing a total of $65,000 to these fraudsters.
One consumer who filed a complaint with the AG’s Office during tax season last year said he was told he owed $3,800 in back taxes that were subject to a court case, and if he didn’t pay immediately the amount owed would triple and a lien would be issued on his property. He sent money to the caller using ReloadIt, which is an instant payment transfer and largely untraceable, leaving him out the money.
Consumers who receive a call like this should hang up immediately. The IRS will never initiate contact over the phone. They will always reach out first through official correspondence by mail. Additionally, the IRS will never ask for credit card, debit card or prepaid card information over the phone.
If you think you’ve been targeted by the IRS impersonation scam, call the IRS at 1-800-908-4490 to confirm the call you received was fraudulent. You should also report the scam to the U.S. Treasury Inspector General for Tax Administration here.
The Indiana Department of Revenue says scammers may attempt to impersonate their agency or others like it, as well.
Consumers who are targeted in any of these tax-related or other scams can file a complaint with the Attorney General’s Office by visiting www.IndianaConsumer.com or calling 1.800.382.5516.
The FTC offers other resources on tax identity theft, including online webinars, here.
