How to avoid tax time phishing scams

Identity theft runs rampant during tax season, so it's important to be a extremely skeptical of any email or call claiming be from the IRS. One way to protect yourself against phishing scams is by learning how to recognize the latest schemes. Scammers are always looking for new ways to trick victims into divulging sensitive information, so safeguarding your personal information (even from people who claim to be IRS agents) is crucial.

In case you don't already know, phishing is a method used by scammers that tricks unsuspecting victims into giving up sensitive information such as bank account, credit card, and Social Security numbers which they use to open up fraudulent accounts in the person's name. They do this via email, phone, mail, and even through phishing sites. The warning signs can sometimes be obvious, but as thieves get sophisticated, so do their phishing methods.

Here are the six top tax scams you need to watch out for:

Rebates Scam: Con artists pretending to be from the IRS call, write, or email people telling them their check is ready, but before they send out the check, they'll need to confirm a few details about their banking account to set up direct deposit. If the person is not willing to give out that information, the con artist tells them they won't be getting their rebate until they do so.
Safety Tips: All you have to do to get your rebate check is file a 2007 income tax return. That's it. Anything else is just a phishing scam. The IRS will not contact you via email or phone regarding your check, so don't trust anything that tells you otherwise.

Audit Scare Scam: Scam artists send fake emails to taxpayers alerting them of an upcoming audit on their tax return. This email tells the recipient to click on a link to complete an IRS form that solicits personal and financial account information. Unfortunately, the victim doesn't know the scammers plan to use this information to commit identity theft.
Safety Tips: Unlike most spam emails, this one appears to address the recipient by name so don't be fooled. Remember that the IRS does not send unsolicited emails, especially if it plans to audit your account. This method is so new and probably very effective, even the IRS says it has never seen it before.

Uncashed Check Scam: A phony IRS agent with a foreign accent calls individuals to verify the status a check that was purportedly sent by mail. He says that he's calling because the check hasn't been cashed and claims the IRS wants to verify the individual's bank account number.
Safety tips: Cashing a check is entirely up to the taxpayer. The IRS says they don't need to know or ask for banking information, except when the taxpayer wants their refund to be deposited into their bank account. In this case, direct deposit information, such as routing and account number, is supposed to be provided to them on a tax return form. IRS agents will never contact a taxpayer by phone or email to verify that information.

Fiscal Activity Scam: According to the IRS, an email has been circulating telling taxpayers the IRS has calculated their "fiscal activity" making them eligible to receive a tax refund of a certain amount. The recipient is then redirected to a phishing site titled "Get Your Tax Refund!" that resembles a genuine interactive page on the IRS site. The page asks taxpayers to enter their SSNs and credit card account numbers.
Safety Tips: The IRS does not send email to taxpayers, so don't click on any links that may redirect you to a phishing site. Additionally, the IRS says it will never ask for PIN numbers, passwords, or any other secret information that would grant them access to your financial accounts.

Tax Law Changes Scam: A bogus email to accountants, businesses, and "treasury" managers instructs them to download information on tax law changes by clicking on a series of links. The IRS believes clicking on the links installs malware on the recipient's computer that gives scammers remote access to the infected machines. This is one way scammers can steal sensitive information stored on the computer such as passwords.
Safety Tips: Before clicking on any URL, find out if it's coming from the official IRS.gov site. You can do this by placing your cursor on the link (without clicking) and checking the site's address on your status bar at the bottom of the browser.

Tax Software Update Scam: Spammers are now targeting the millions of people who use tax software every year. According to this article, spammers are sending out an email that asks users to download tax software updates as required by a new law. The URL appears to come from the IRS (irs.gov/softwareupdate), but when clicked it redirects the user to a site hosting a spyware. Turbo Tax users are getting a similar email from turbotax.cn, not turbotax.com.
Safety Tips: Never click on a link that looks suspicious, or download software that's not from a trusted site. If you think your software needs an update, go directly to the site, just make sure you double check the domain.

Things to remember

The IRS never uses email to contact taxpayers about tax issues, yet it says over 33,000 scam emails have been forwarded to them and knows of at least 1,500 phishing scams thieves have used. Remember that these con artists will go to great lengths to appear legitimate and will even try to fool you into believing the email comes straight from the IRS. The next time you get a suspicious email about your taxes forward it to phishing@irs.gov and delete it.

Here's more information about scams currently reported to and by the IRS:

IRS Warns Taxpayers of New E-mail Scams
IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting
Phishing Scams, Frivolous Arguments Top the 2008 “Dirty Dozen” Tax Scams