Scamming ahead of the curve with taxes

According to Internal Revenue Service officials, tax scams have increased 400 percent this year. The majority of which have been phishing and malware scams. (Don Campbell | HP Staff)

According to Internal Revenue Service officials, tax scams have increased 400 percent this year. The majority of which have been phishing and malware scams. (Don Campbell | HP Staff)

By Tony Wittkowski | Business Reporter | The Herald-Palladium

Email and phone scams used to trick taxpayers into giving up personal information has increased 400 percent this year, officials say.

The Internal Revenue Service released a report this week showing what scams have become popular and how many more incidents have occurred. The majority of scams are emails or calls claiming a taxpayer has failed to pay taxes.

According to the report, January featured 1,026 phishing and malware incidents – up from 254 during the same month last year. The trend continued in February, with 363 incidents reported so far. The total topped the 201 full-month total in February 2015.

The 1,389 incidents reported this year is ahead of the curve, representing more than half the 2,748 total for all of last year – with two months remaining for tax season.

“This dramatic jump in these scams comes at the busiest time of tax season,” IRS Commissioner John Koskinen said in the report. “Watch out for fraudsters slipping these official-looking emails into inboxes, trying to confuse people at the very time they work on their taxes. We urge people not to click on these emails.”

Tax professionals have reported being targeted by similar phishing scams that seek their financial information.

Linda Cooper and Sheila Boettger, certified public accountants for CooperBoettger PLLC in St. Joseph, have come across a few scams in professional and personal settings.

Boettger said she’s received two phone calls this year where the caller demanded money. One of her clients was prepared to meet an “IRS person” and pay money, but they called the office before doing so.

“We usually get a call from a client when someone is usually panicked,” Boettger said. “It’s important no one gives out their Social (Security Number). The reputation of the IRS over the years for a lot of people is that they strong arm you. That’s not our experience in any way. But there are plenty of people who find that believable. If you’re unsure of anything, call someone or reach out to your CPA.”

Cooper said she’s heard about a dozen of these instances occurring.

She recalled a phone conversation with a client from Lansing last year, when they came across a convincing caller.

“He’s a savvy business man and he got a call that said he needed to go to Meijer and pay for $4,000 of prepaid cards,” she said. “They told him that if he refused to do so, the police would be sent to arrest him. They were so convincing that he called me, asking for bail money if it were to happen.”

While Cooper could not calm down her client, she was able to get the chief of police on the phone with him to explain he would not be arrested.

Cooper said the IRS doesn’t email or call residents, which should be the first sign that it is a potential scam. She said the IRS sends its information by mail.

“It makes sense to most, but scammers are prepared with convincing arguments,” Cooper said. “People are caught unsuspecting. They’re not expecting that call, that’s part of it. There are different variations each year because when they are getting too many people turning down a call, they alter what they say.”

When it comes to emails, Cooper said she tells her clients to avoid clicking any links embedded in an email. If someone calls claiming to be from the IRS, Cooper said it is best to hang up and report it – though most scammers use burner phones that can’t be traced.

Anyone unsure of a potential scam or wishes to report one can call the Treasury Inspector General for Tax Administration hotline number at 1-800-366-4484.

Contact Tony Wittkowski at twittkowski@TheHP.com or (269) 932-0358. Follow him on Twitter: @tonywittkowski.

(Author’s Note: This article was originally published on Feb. 25, 2016)

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