IRS warns of latest tax scam: 3 ways to avoid becoming a victim

The Internal Revenue Service (IRS) and Federal Bureau of Investigations (FBI) recently announced that the public should be on the lookout for the latest scam. The scam is successful because it is deceptively realistic. It involves an email with a claim that one of these federal agencies is attempting to contact the recipient. The email provides the recipient with a questionnaire. When the recipient clicks the link to download the questionnaire, ransomware is installed onto the computer.

What does the ransomware do to the computer? Once installed, the ransomware locks the user out of data stored on the computer. In order to regain access, the scammers demand payment. In exchange for the payment, the scammers state that they will provide the recipient with the code that will disable the ransomware.

What should a recipient do if they receive this email? As with any email that is from an unknown sender, do not click on any links or open any attachments. The IRS and FBI state that this email is particularly effective because the scammers have included emblems from the agencies. This gives the email the appearance of an official contact from the federal agencies.

A recent piece by Accounting Web provides some tips on what to do in the event the recipient opens the link. First, do not pay the ransom. In many cases the scammers will not unlock the computer even after they receive payment. Instead, contact the FBI’s Internet Crime Complaint Center or the IRS’s phishing complaint center and report the problem.

How can a recipient know that the contact is not official? There are a number of steps that people can take to avoid becoming a victim of this and similar scams. Three examples include:

• Look at the language. Federal agents will not use questioning language when contacting someone about a potential tax issue. If there are threats or abusive language used in the contact it is likely a scam.
• Look at the form of contact. It is also very unlikely that the IRS would ever make an initial contact with an email. A mailing is much more likely.
• Look for a demand for payment. A demand for immediate payment is also a red flag. Do not provide a credit card or debit card number.

As noted above, the IRS generally begins contact through a mailing. However, it is wise to question even an official contact. Not all requests from the IRS are in your best interest. A notification of an audit should be taken seriously as it could lead to additional tax demands or penalties that are not your obligation. Contact an attorney to discuss the impending audit and better ensure your rights are protected.