Tax season is also scamming season — although many tax scams continue year-round. Fortunately, if you familiarize yourself with some of the more common schemes and understand what the IRS will and won’t do, it’s easy to avoid them.

How to Spot Common Tax Scams

Tax scams can be complex and widely varied, but they’re easy to avoid if you know how the IRS operates. Here are some common tax fraud schemes and red flags you can watch for:

Phone call scams. Fraudsters impersonating IRS employees will call or leave a message, typically using fake names and phony identification badge numbers and often altering the caller ID to make it look like a legitimate IRS number. They tell victims that they owe money to the IRS and threaten them with arrest, suspension of business or driver’s licenses, or even deportation unless they pay promptly using gift cards, prepaid debit cards, or wire transfers. In the latest twist, the caller threatens to suspend or cancel the victim’s Social Security number. There are a number of red flags here:

Red flag #1: Unexpected phone call. The IRS does not initiate contact about a tax matter by phone, email, or in person, without first sending you a bill or notice by regular mail delivered by the U.S. Postal Service. Even in special circumstances that prompt a visit from an IRS representative — such as an overdue tax bill, delinquent return, audit* or criminal investigation — visits are almost always preceded by a series of notices in the mail.

Red flag #2: Threatening language. The IRS will not threaten you with arrest, deportation, or revocation of a driver’s or business license for nonpayment of taxes.

Red flag #3: Demanding payment by specific payment methods, such as a prepaid debit card, gift card, or wire transfer. The IRS will mail you a bill if you owe any taxes.

Phishing. Fraud perpetrators send fake emails, designed to look like official communications from the IRS, tax software companies, or even victims’ tax advisors. The intention is to gain access to victims’ financial information or trick them into downloading malware that allows access to their computers. These emails often contain links to bogus websites that resemble the official IRS site and ask victims to “update your IRS e-file immediately.” Fraudsters use this information to file false income tax returns or engage in other identity theft schemes.

Red flag: Unexpected email. Always be suspicious of emails that purport to be from the IRS (or any official body) unless they begin with a paper letter. And even then, it’s best to call the agency directly to verify the contents of the letter.

Property lien scam. With this fraud type, a thief sends a letter from a nonexistent agency asserting that the victim owes overdue taxes and threatens an IRS lien or levy on the victim’s property. Typically, the fake agency has a legitimate-sounding name, such as the Bureau of Tax Enforcement.

Red flag: Demanding immediate payment. The IRS will always give you an opportunity to question or appeal the amount they say you owe. The IRS also will never ask a taxpayer to make a payment to a person or organization other than the U.S. Treasury.

These are just a few examples of the hundreds of tax-related scams the IRS sees on a regular basis. Fraudsters are continually developing new, more sophisticated schemes, as well as variations of tried-and-true ones. So it’s important to be on high alert whenever you receive communications that purport to be from the IRS, a state or local tax authority, or a collection agency working on their behalf.

If you receive suspicious tax-related communications, check out the IRS webpage on tax scams, or contact your CRI tax advisor.