Guarding Against IRS and Social Security Scams

If you’re the type of person who takes calls from unknown numbers, there’s a good chance you’ve answered a call that starts with some version of this:

“Hello, Mr. Smith, this is the Department of Social Security Administration. I’m calling today to let you know that your Social Security number has been suspended due to suspected illegal activity. We need to verify some of your information, or your account will be deactivated.”

Even if you don’t answer these kinds of calls, the voice on the other end will probably leave an urgent message to call them back, or you could also suffer “dreadful” consequences.

The caller might claim to represent the IRS, Social Security, Medicare, or other government agencies you rely on for benefits.

The calls are often alarming and upsetting. But here’s the good news.

They are all fake.

A fraudster is attempting to scam you by getting you to divulge personal information. They want to wreak havoc on your life, finances, and long-term credit by stealing your Social Security number, bank accounts, pin numbers, and other sensitive details.

Emails and letters are also common and can be just as devastating if you do the wrong things when you get one.

Government agency scams crimes are on the rise

In 2018, the Social Security Administration reported 63,000 consumer phone scam claims. The median loss reported by the FTC for those victimized by a scam Social Security phone call in 2018 was $1,484.

Multiply that by several different kinds of scams being committed using the names and resources of several agencies, and you start to get an idea of just how big the problem is.

Add this to a growing problem of data breaches in the private sector, and you’ve got a recipe for massive ongoing fraud and financial losses.

For example, the breach of Equifax that affected 143 million consumers is just one example of many where hackers accessed birthdates, addresses, driver’s license numbers, and more.

Examples of common scams

IRS and Social Security scams can take place year-round. Don’t believe that just because it’s the height of tax season that you’re more vulnerable. Scammers operate 365 days a year.

Taxpayers may get phone calls or automated messages from scammers who claim to be from the IRS. They often say the taxpayer owes money and demand immediate payment.

Rather than leap into a big mistake, if a taxpayer isn’t sure whether they owe any tax, they can view their tax account information on IRS.gov to check their status.

By contrast, some scammers also lie to taxpayers and say they are due a refund. That’s so they can trick victims into giving their bank account information over the phone.

Recent immigrants who are not as well versed in IRS and Social Security rules and regulations can be especially vulnerable. Scammers will prey upon their fears and ignorance of U.S. laws. Victims are sometimes threatened with arrest, deportation, or suspension of a business or driver’s license. Often, the caller becomes hostile and insulting. Another troubling aspect is that victims are often approached in their native language, adding to the perceived validity of the call.

Disabled people are not immune from scams, either. Some scammers use video relay services (VRS) to try and scam deaf and hard of hearing people into divulging information. Taxpayers should not trust calls just because they’re made through VRS, because interpreters don’t screen calls for validity.

Some taxpayers receive tax refund emails that appear to be from the Taxpayer Advocacy Panel (TAP). These emails are phishing scams. Perpetrators are trying to trick victims into providing personal and financial information. TAP is a volunteer board that advises the IRS on large scale issues affecting taxpayers. It never requests any taxpayer’s personal and financial information.

Because many taxpayers know the IRS will never call to demand immediate payment over the phone, some scammers send letters instead, hoping folks will take the bait. The letters use realistic looking letterhead and related materials as a way to further deceive people. Phony IRS letters can include facts about real tax debts. That can rattle a taxpayer, but be aware that some tax-related information, such as liens that have been filed against taxpayers, are available to the public.

The IRS has also seen a rise in recent years of scammers calling victims trying to take advantage of their generosity when it comes to disaster relief efforts. They may also offer up the tax-deductible benefit as a way of inducing a victim to turn over private information.

Some scammers will use data on W-2 forms to file fraudulent tax returns in a victim’s name. However, the IRS has established a process that will allow businesses and payroll service providers to report any data losses related to this W-2 scam quickly.

Scammers also target Social Security numbers. In one version, scammers call and claim to be able to suspend or cancel the victim’s SSN. They will leave a message if they don’t talk to you in yet another attempt by con artists to frighten people into returning ‘robocall’ voicemails.

You may also get a phone call saying that you will be charged for services that Social Security provides for free.

In recent years, the language on scam Social Security calls has also become more threatening. While Social Security may call some people who have current business with the agency, an employee will never threaten you for information or advise you that you face potential arrest or legal actions for failing to provide information.

What you can do to protect yourself

If screening all your calls is not an option where you only answer calls from numbers you recognize, there are other ways to protect yourself.

If you get a phone call from someone purporting to be from the IRS, Social Security, or other government agencies, and they ask you for personal information, hang up immediately.

Don’t give in to any pressure tactics, whether it’s for a charity donation, an apparent great deal, or other similar offers.

For suspicious emails, don’t open any attachments or click on any links. These links could have malicious code that will infect your computer.

Don’t provide your credit card information, bank account information, or other sensitive personal information ever!

Don’t trust caller ID. Scammers can change the number you see in a tactic known as spoofing.

You can reduce the number of calls you get proactively by registering your phone number with the National Do Not Call Registry. Register online or call 1-888-382-1222.

Know under what circumstances that the IRS, Social Security, and other agencies will contact you and how they will do it. For example, the IRS will NEVER call to demand immediate payment using a specific payment method such as a prepaid debit card or wire transfer. You have rights as a taxpayer, and you need to understand what they are.

However, at times, an IRS collections employee may call you or show up at your home or employer unannounced to collect a tax debt. Sometimes, the IRS will assign certain cases to private debt collectors but only after giving the taxpayer written notice. IRS criminal investigators may also appear in your life, but it will be only to conduct an investigation and not to collect any money from you.

Reporting possible illegal scam activities

It’s crucial to report phone scams to federal agencies. They can’t investigate individual cases, but your information can be used to build a more significant case against scammers.

Here’s who to contact:

• For attempted IRS phone scams, contact the Treasury Inspector General for Tax Administration. Use the “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484. Report unsolicited emails claiming to be from the IRS, or an IRS-related function like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov.
• Report telephone scams online to the Federal Trade Commission or call 1-877-382-4357.
• Report all robocalls and unwanted telemarketing calls to the Do Not Call Registry.
• Report caller ID spoofing to the Federal Communications Commission  You can do this online or by phone at 1-888-225-5322.
• If you think an SSA scammer has contacted you, call the Social Security Fraud Hotline at 1-800-269-0271.

Steps to take if you’re a victim

There are several things you should do if you’ve been scammed, either by telephone, email, or other means.

Place a fraud alert with a Credit Reporting Agency. You reduce the risk of accounts opened in your name without your authorization. If you place an alert with one of the following agencies, they will notify the other two on your behalf.

• Equifax — (888) 766-0008
• Experian — (888) 397-3742
• TransUnion — (800) 680-7289

Monitor your financial accounts for suspicious or unauthorized activities. Close any accounts that weren’t opened with your permission and either freeze or close any account that has unauthorized activity.

Check your computer to see if you have any downloaded malware or viruses. A hacker or scammer may be stealing your personal information straight from your computer.

Secure your Proof of Identity. You’ll probably be required to submit an affidavit and provide proof of your identity. The Federal Trade Commission’s ID Theft Affidavit is widely accepted and can be downloaded here.

File a police report. Law enforcement may or may not take action, but you may need the report as proof that you have taken appropriate steps.

File a complaint with the appropriate state and federal agencies. See the resources listed above.

Order copies of your credit reports and review them thoroughly. If you have placed a fraud alert, you can order a copy of your report for free. If your ID theft happened recently, wait a bit. That is because some creditors only report to agencies once a month, so it may take a while for the activity to show up in your files.