7 Simple Rules to Avoid Tax Scams in 2017

By Matthew Frankel Markets Fool.com

Tax season is right around the corner, and unfortunately, that means that scammers might be after your hard-earned money. Tax scams come in many forms, but two of the biggest problems expected in 2017 are phone scams and phishing scams (you can read more about how they work here), with thieves either attempting to steal your money, personal information, or both. Fortunately, these types of scams are avoidable if you know these simple rules regarding what the IRS will or will not do.

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1. The IRS will never call to demand immediate payment.

A popular variation of IRS phone scams involves a caller trying to con the victim into sending cash immediately to settle a tax debt, usually through a prepaid debit card or wire transfer. Even if you have a legitimate tax debt, you'll always be given a reasonable amount of time to pay it.

2. Before the IRS calls you about taxes owed, you will always be mailed a bill.

If you receive a phone call about a balance you owe to the IRS, and never received a bill in the mail, chances are it's a scam. If you think you may actually owe taxes, but for whatever reason never received your notice, hang up the phone anyway. You can call the IRS back at 1-800-829-1040, and they can tell you if the debt is legitimate or not and then at least you'll know you're talking to the right people.

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3. The IRS will always give you an opportunity to question or appeal any amount you owe.

You can read about the IRS' appeal process on its website, but in a nutshell, there is a process in place that allows you to appeal the amount you owe, or ask questions about it so you completely understand where the tax debt came from.

4. The IRS will never require you to use a specific method of payment, or ask for a credit/debit card number over the phone.

I already mentioned that one popular tax scam involves asking the victim to send cash via a prepaid debit card or wire transfer. There are other scams that aim to steal your identity or other financial information, in which thieves will try to trick you into giving a credit card number.

5. The IRS will never threaten to have local police or other law enforcement groups arrest you.

Scammers can get rather threatening in order to try to get your money. As an example of this, there is a version of the phone scam that specifically targets recent immigrants and threatens arrest and/or deportation if the "debt" isn't paid immediately. The IRS doesn't do this -- period.

6. All official IRS websites start with www.IRS.gov.

If you receive an email or other form of communication that directs you to an IRS webpage, take a look at the page's address. If it doesn't start with www.IRS.gov, it is not part of the real IRS website. Many scam websites are designed to look exactly like the IRS' official website, but will have a different variation of this address, such as IRSgov.com. Don't be fooled.

7. The IRS will never initiate contact with taxpayers by email or text messages.

Speaking of emails: This will never be the first way the IRS contacts you. As I mentioned earlier, you'll always receive a written notice in the mail first if you owe money. Once you're dealing with an IRS agent, he or she may email you, but contact will never be initiated in this manner.

As long as you know these rules, it should be easy to identify tax scams and avoid becoming a victim. If you're worried about becoming a victim, bookmark this list or print it out, and if any of these rules are violated, chances are that you're dealing with a scammer. Hang up the phone immediately, don't respond to the email or click on any links, and report the scam.

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