A warning on tax scams, including one involving recovery rebate credit

We have a warning about a rise in tax-related scams. One scam involves the recovery rebate credit.

In 2023, the most recent year we have data for, Americans lost $5.5 billion dollars to tax scams.

And already this filing season cybersecurity experts are seeing a 77% increase in tax-related phishing attempts.

"With the rise of generative AI, it's almost impossible to detect such scams and phishing attempts," said Karin Zilberstein of Guardio. "It's easy to create websites that look similar to the IRS website."

It's also easy to impersonate an IRS official.

The current warning is that many impersonators are claiming you must provide personal information to receive your economic impact payment, also known as a recovery rebate credit.

"They reach out to consumers in a variety of ways, usually from text to email to phone calls," said Charlie Moore, digital safety advisor at Aura.

Don't take the bait. Eligible taxpayers, who didn't claim the credit on their 2021 tax returns, don't have to take any action. The money will be automatically directly deposited or sent by paper check by the end of this month.

Scammers are also impersonating tax preparers, even setting up fake filing websites. It's all to get your information to commit fraud, including filing a tax return before you do.

So protect yourself.

"Number one, file early. Number two, do not respond to any unsolicited emails, texts, or phone calls. And number three, verify. Verify any person or company that you're considering doing business with," said Moore.

Check IRS.gov for a directory of authorized e-filing providers.

Also, ask for a preparer's PTIN, a preparer tax identification number.

"They should be able to provide that to you very rapidly. It's issued by the IRS and issued to the name of their company," said Moore.

The IRS will never initiate contact with you and ask for your sensitive, financial information via text message, email, or phone.

And federal government website addresses end in ".gov". Any other domain, including ".com" or ".net," is a red flag.

If you do get a scam text or email, do not respond or click on any links. Always report the message to the appropriate authorities or the IRS hotline.