Many people are worried about overpaying taxes, but there’s a bigger concern you should be aware of: losing money to tax scams.

Internal Revenue Service (IRS) impersonation scams have become increasingly common. In fact, over 16 thousand taxpayers have lost more than $85 million to IRS impersonation scams, according to a report from the U.S. Treasury Inspector General for Tax Administration (TIGTA).

Scammers may present themselves as IRS agents and employ sophisticated tactics to deceive individuals into divulging personal or financial information or making immediate payments.

So how can you protect yourself? The first step is to understand how these scams work.

How IRS Scams Operate

IRS impersonators use several methods to deceive unsuspecting taxpayers. The most common tactic involves phone calls where the scammer pretends to be an IRS employee. These calls can be highly convincing, as scammers often spoof the caller ID to make it appear that the call is coming directly from the IRS. This makes the call seem authentic, increasing the likelihood that the target will answer and share valuable information that the scammer can use to commit identity theft.

From there, an IRS phone scam can involve a variety of scenarios, including:

· Demands for immediate payment. Scammers may claim the taxpayers owe money to the IRS and will face serious consequences, including arrest, deportation, or suspension of a business or driver’s license if they don’t pay immediately.

· Request for personal or financial information. The scammer may request personal or financial information, such as Social Security numbers, bank account information, or credit card numbers, under the guise of verifying the taxpayer’s identity.

· Threats and intimidation. Scammers frequently use threats to create a sense of urgency, pressuring the taxpayer to comply quickly without verifying the call’s legitimacy.

· Promises of an unclaimed refund or tax credit. Scammers might ask for sensitive information to “help” the taxpayer claim a tax refund payment or a tax credit like the Employee Retention Credit, Child Tax Credit, or Earned Income Tax Credit.

Phone calls aren’t the only avenue for tax scams. Taxpayers have encountered a fraudulent IRS website, received messages or social media communications, scam emails and text messages claiming to come from an IRS employee.

Red Flags to Watch Out For

Recognizing the warning signs of IRS scams is the first step in protecting yourself. Here are critical red flags to be aware of, according to the Internal Revenue Service and other law enforcement groups.

1. Unsolicited phone calls. The IRS will never initiate contact with taxpayers by email, text, social media, or phone call. Instead, the agency’s first correspondence comes through official correspondence by mail. Be wary of an unexpected call or email claiming to be from the IRS.

2. Demand immediate payment. The IRS will never demand payment over the phone, especially via a specific payment method like a gift card, prepaid debit card, or wire transfer. These are popular payment methods for criminals because they’re difficult to trace and almost always impossible to recover. It’s a clear sign of a scam if you receive such a demand.

3. Threats of legal action. Genuine IRS representatives will not threaten you with immediate arrest, deportation, or license suspension. Scammers often use these threats to intimidate victims into compliance.

4. Request for personal and financial information. The IRS will not ask for sensitive information over the phone. Requests for Social Security numbers, bank account details, or credit card numbers are a significant red flag.

5. Use of pressure tactics. Scammers may use high-pressure tactics, insisting that you must act immediately. The IRS provides time and a process for taxpayers to question and challenge their tax liabilities.

How to Protect Yourself from an IRS Impersonation Scam

Here are a few steps to safeguard yourself from IRS impersonation scams.

1. Verify the caller. IRS phone scam perpetrators may provide fake identification badge numbers to make themselves appear legitimate. If you receive a suspicious call, don’t provide any personal information. Instead, hang up and call the IRS directly at their official number (1-800-829-1040) to verify the call’s authenticity. You can also create or log into your online account at IRS.gov to confirm whether you really owe taxes or penalties for a particular tax year.

2. Don’t open or click on links in a scam email. If you get a suspicious email, avoid opening it, clicking on links, or opening attachments. These emails can be very realistic. They might have a serious-sounding subject line and display the IRS logo or look like official communications from a tax software company like TurboTax. If you click on the link or download the attachment, your computer can become infected with malware that criminals can use to access your confidential information. Delete it or forward the email to the Federal Trade Commission Anti-Phishing Working Group at [email protected] or the IRS at [email protected].

3. Do not engage with scammers. If you suspect a scam, don’t engage with the caller. Avoid answering their questions or following their instructions. Simply hang up.

4. Report IRS scams. Report IRS impersonation scams to local law enforcement and TIGTA online at tigta.gov. You can also report the scam to the Federal Trade Commission (FTC) using the FTC Complaint Assistant.

5. Monitor your accounts. Regularly monitor your credit report, bank accounts, and other financial accounts for unauthorized activity. Early detection is crucial in preventing identity theft or further financial harm.

6. Educate yourself and others. Tax scam tactics are constantly evolving. Stay informed about the latest scam tactics and educate your family and friends—especially recent immigrants and elderly relatives, as they’re popular targets for these scams. Awareness is a powerful tool for preventing fraud.

Turn to Tax Professionals If You Think You Owe Taxes

Are you worried that the email, phone call, text messages or social media posts might be legitimate? Don’t interact. Instead, hang up and call your tax advisor. We can contact the Internal Revenue Service or state tax authority on your behalf to verify whether you owe taxes or are due a tax refund.

IRS phone scams are a serious threat and can happen throughout the year, not just during tax season. You can protect yourself from falling victim by staying informed and working with a trusted tax advisor. Remember the red flags, verify the legitimacy of any communication claiming to be from the IRS, and take immediate action if you suspect a scam to ensure your personal information and finances remain secure.