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Better Business Bureau warns of these 4 common scams ahead of tax season

CBS News Live
CBS News Chicago Live

CHICAGO (CBS) — The Better Business Bureau is warning people ahead of tax season to be aware of various potential scams fraudsters can perform in an attempt to steal money and identity information.

The BBB says scammers will attempt to capitalize on taxpayers who may feel pressure when filing.

"Because of the intricacies of filing your taxes, falling victim to a tax scammer is not inconceivable," said Steve J. Bernas, BBB president and CEO. "As soon as tax season opens, tax scammers come out of the woodwork."

The organization says scammers will attempt to scare or trick victims with fake phone calls, texts, emails, and letters that play on their emotions, including:

  • Tax Identity Theft: Scammers will attempt the theft through a fake tax service, data breach, or even a phishing scam. Victims would be tricked into clicking on a link in a text message that downloads malware to their devices. In some cases, victims don't realize they were targeted until they file or even later.  
  • Email Phishing Scams: These scams appear to be from the IRS but include a link to a fake website that looks similar to the IRS website. The emails are meant to direct victims to call a bogus number in the email or click on a link in an attempt to steal money and/or personal information.
  • IRS Impersonation Scams: This scam usually comes in the form of fake phone calls of a scammer using a spoofed caller ID, even giving a fake badge number, and, in other cases, using it in a threatening manner. They would claim victims would owe back taxes and pressure them into paying by prepaid debit card or wire transfer. The scammer makes threats of arrests and fines if victims don't comply. They would also claim they are issuing tax refunds and need the victim's personal information by speedballing the process to not give them time to think.
  • "Ghost" shady tax preparers: These scammers pop up around tax time, usually in a vacant storefront, promising tax filers fast or large refunds. These shady preparers charge high fees and can disappear without being found, costing victims their refunds.

Other tips to help avoid scams include checking out a business before trusting them with your information, making sure deposits go to a personal account, and filing as early as possible. 

According to the Internal Revenue Service, taxpayers lost $5.5 billion due to tax scams and fraud in 2023.

Tax season kicks off on Monday, Jan. 27. with the filing deadline of April 15.

Anyone who may have encountered a scam is advised to report it to the BBB Scam Tracker

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