Since we live in the digital era, with any information just a click away, it is no wonder that scammers have become more creative in their attempts to trick us. Among other types of scams, tax-related ones are very common and they hit thousands of people every year. Calling people on the phone is one of the most common tax-related scam, and you should know how to react if you receive such phone call.
How a phone tax scam can affect you
There are two ways this tax scam can affect you. First, some of them are aimed at making you pay a certain amount of money. These scams usually involve threatening phone calls that require immediate tax payments. This way the scammers can frighten people, and they pay the requested amount to someone that turns out to be a complete stranger and fraud.
Another way tax frauds work is stealing your personal information. The scammers can get your personal information such as name, address, social security and credit card numbers and so on. These frauds can be even more dangerous, because they are not aimed only at getting a certain amount of money. This way, you can lose everything you have on your bank accounts, and have even more trouble because of identity theft.
Even if you do not fall for the scam, it is still not very pleasant to receive a phone call where someone threats you and blackmails you. In addition to potential loss of money or identity theft, you are also exposed to stress.
How to recognize and avoid phone tax scams
As we mentioned above, a phone call where you are required to pay tax is one of the most common tax scams. You get a call from a person who claims to be the IRS employee. He or she tells you that you have an outstanding amount of tax debt to pay, and that you need to do it immediately if you want to avoid tax audit, severe penalties or even arrest. They usually sound hostile and aggressive in order to intimidate you, and they give you the options of paying via wire transfer or payment card.
Sometimes, phone scams are directed toward getting your private information. The person on the other side of the phone can trick you into providing your credit card or social security number instead of asking you to pay tax immediately. This way, you can experience identity theft and the frauds can do you even more damage.
In order to avoid a scam like this, keep in mind that the IRS never contacts taxpayers over the phone. It is even less likely that the IRS employees will threaten you in any way. If you have a certain amount of tax to pay, the IRS will send you the check via mail. Furthermore, the IRS employees are not allowed to ask for your credit card or social security number over the phone. Therefore, if you receive a call like this, it is perfectly legit to simply hang up. If your phone identifies the number of the caller, make sure to report it to the IRS.