Social Security-related scams are very common, according to a March report from the Federal Trade Commission, which said it’s the number one “government imposter scam in the United States.”   In 2023 alone, consumers reported losing more than $126.5 million in Social Security-related scams.  That's millions!

The U.S. Social Security Administration announced this week that a $600 payment increase scam has been promoted online. Social Security Commissioner Martin O’Malley said, “Reports of a $600 payment increase are FALSE, please be aware and don’t fall for this stunt.”

One of the biggest nightmares to straighten out is someone stealing your name and social security number and filing a fake tax return with that information.  It can take up to a year to straighten out the mess and your refund is held until it is done.  But, a very simple added precaution can stop those thieves dead in their tracks.  It is called an IP Pin.  If that pin number is not on your return, (you get a new one each January) then the IRS will not accept your return electronically.  Period.  So they can steal my name/SS# and try to file a return to get that free government money, but it will do them no good. 

Although scams can happen any time of the year, they tend to be more prevalent during tax season. Scammers use tax refund time to target victims through various email phishing attempts, fraud schemes, phony phone calls and other deceptive activities. Here are four common tax season scams:

1. “I am from the IRS, and you will be arrested if…”

Beware of phone calls from anyone claiming to be an IRS employee or law enforcement officer. Fraudsters impersonate government officials to intimidate you, which is a form of social engineering commonly used by scammers. Some tricks scammers use are:

Those that can afford to buy high priced art pieces can properly claim donations of art on their taxes. But some unscrupulous promoters may use direct solicitation to promise values of art that are too good to be true. These promoters persuade taxpayers, usually high-income taxpayers, to purchase the art, wait to donate the art and then take an incorrect deduction for the art donated. Be aware though, the IRS has active promoter investigations and taxpayer audits underway in this area.

Participating in an illegal scheme to avoid paying taxes can result in imprisonment and fines, as well as the repayment of taxes owed with penalties and interest. If you become aware of any abusive tax scams, please report them to the appropriate contact below.

Phishing Scams

Phishing is a scam typically carried out through unsolicited email and/or websites that pose as legitimate sites and lure unsuspecting victims to provide personal and financial information.

As the old saying goes: When something sounds too good to be true, it probably is. Taxpayers with outstanding tax bills might be tempted by businesses who advertise and offer to help them reduce their tax debt. These businesses, often called Offer in Compromise mills, make huge claims about reducing unpaid taxes for pennies on the dollar. Unfortunately, these companies sometimes don't deliver and charge large fees.

An Offer in Compromise with the IRS can help some taxpayers who can't pay their tax bill.

An Offer in Compromise is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount owed. The offer program gives eligible taxpayers a path toward paying off their debt when they otherwise couldn't or would face financial hardship.

Some identity thieves use taxpayers' information to file fraudulent tax returns. By requesting Identity Protection PINs from the Get an IP PIN tool on IRS.gov, taxpayers can prevent thieves from claiming tax refunds in their names. Seeing that it is free, this is a no brainer.