How Tax Fraud is Conducted

Last updated on November 8, 2022

There are various methods  scammers use to defraud both taxpayers and the IRS. Most taxpayers have heard about identity theft, phishing and return preparer fraud. These three are the most widespread tax frauds. Tax fraud is usually conducted by scammers posing as a reputable institution such as the IRS or well-known bank.

Scammers tempt, threaten, panic or persuade taxpayers into cooperating with them. They use email, phone, and sometimes visitations to communicate with people. They may use fake badges, documents, caller ID, and websites/web pages to convice people that they are authentic.

A distinguishing characteristic of scammers is that they are in a hurry. They will not allow time to think and authenticate facts. If a person is unresponsive to their threats or attempts at persuasion, they will become impatient and harsh. Although asking questions is a good way to derive more information about the intentions of the caller, it is wise not to entertain suspicious callers.

Tax fraudsters are usually after Social Security Numbers, personal details, tax information, financial information, and cash. The best way to keep yourself unharmed by tax scammers is to keep your sensitive information safe. Sharing information on new mediums of communication such as the Internet or over the phone should not be done unless you are certain of who the recipient of that information is.