The IRS has, consequently, warned taxpayers about an increase in phishing scams that seeks to defraud them of their tax details in preparation for the coming Tax Day. These two scams, otherwise known as phishing and smishing, are taking advantage of the tax season to perpetrate their cons.

Prevalence of Phishing and Smishing Scams

The IRS has noted with concern that there has been an increased rate of impersonation of its officials especially during the tax season. Phishing attempts usually consist of emails originating from the IRS with links to fake websites or even email notifications that the recipient is eligible for a tax refund or may be subjected to legal action for tax fraud. It is composed of emails that include links to bogus websites with appearances similar to the IRS's authentic website: they are meant to deceive users into providing their personal data.

Smishing: commonly known as text message phishing, works similarly to email phishing. Often the fraudsters would send warning messages notifying the recipient that their account has been temporarily frozen because of certain suspicious activities or that the recipient is eligible to a return of a sum of money from a number of amounts. Such messages encourage the recipients to click on the provided links, which can result in downloads of malware, or ransomware onto the device.

"Scammers are relentless in their attempts to obtain sensitive financial and personal information, and impersonating the IRS remains a favorite tactic," said IRS Commissioner Danny Werfel. "People can be anxious to get the latest information about their refund or other tax issues, so scammers frequently try using the IRS as a way to trick people."

Protecting Yourself from Scams

As a measure to enhance self-protection from fraudsters, the IRS has reiterated that it does not communicate with taxpayers using electronic methods of communication, such as emails, text messages, or social media, with messages concerning the refunds or bills. The major communication used widely by the IRS is particularly through written letters and the most common method of conveying these letters is through the regular post. This feature is vital in the ability of a person to differentiate between a genuine message from a fake one in their in-box.

Taxpayers are advised to report any suspicious emails or texts to the IRS. Suspicious emails should be forwarded to phishing@irs.gov, and recipients should then delete the email. For suspicious text messages, individuals should forward the text to 7726 (SPAM) and send the message details, including the caller ID, to phishing@irs.gov before deleting the message.

"Never click on any links in unsolicited messages claiming to be from the IRS," Werfel advised. "If you're uncertain, verify the sender's identity through a separate, trusted method, such as calling a number you know to be accurate."

The IRS also issued its annual "Dirty Dozen" list, the Summaries of which encompass various schemes targeting taxpayers, businesses, and tax professionals. It's important to create such a list in order to inform the public and madepreventing of such activities possible.

Reporting and Verification

Phishing and smishing scams are no longer confined to plain taxpayers; rather they also target tax attorneys, payroll service centers and other human resource personnel having control on personal and financial data. These schemes can create such effects as identity theft and huge loss of money among victims.

Those risks can be mitigated according to the IRS suggestions to turn to two-factor or multi-factor authentication for email. Further, measures should be taken whereby individuals and business establishments should make use of updated security software and should always be cautious about the unwanted messages.

If a taxpayer receives a suspicious email or text that requests personal information, such as details about a large investment, inheritance, or lottery winnings, they should not reply, open attachments, or click on links. Instead, they should report the incident to the Treasury Inspector General for Tax Administration (TIGTA), the Federal Trade Commission (FTC), and the Internet Crime Complaint Center (IC3).

"By being vigilant and cautious, taxpayers can protect themselves from these evolving scams," Werfel emphasized. "Awareness and prompt reporting are key to preventing these fraudulent activities from causing harm."

New developments here is that the IRS also remains active with state tax agencies, as well as the tax industry within the Security Summit, while its goal focuses on both strengthening security, and also increasing awareness on threats. By doing so, the IRS works to protect both taxpayers and the integrity of the tax system.