I've got some good news and bad news for you. Are you ready? OK -- first, the good. You've just received an email from the nice people at the Internal Revenue Service. That should be exciting enough just on its own. After all, it's always nice to hear from people via email, and if our government's own tax agency is on such friendly terms with you, well, that's pretty sweet. But it gets better. The email tells you that you've got a modest tax refund due to you!
Woo hoo! That's some extra spending money you hadn't counted on. It's a mini-windfall that you'll enjoy spending.
But here's the bad news: It's a hoax. And worse still, you're not the only one receiving such emails.
This is yet another example of "phishing," a scam whereby some dastardly sort sends you an email that looks very legitimate -- and urgent. I've received plenty of these myself. One might tell you that there's a problem with your account at eBay's
If you fall for such emails, you'll end up at websites that may look like familiar places, but instead exist solely to get you to enter valuable information, such as your Social Security number, your credit card number, your contact information, and perhaps even your bank account number.
Don't do it!
It's tempting to fall for these scams because of the urgency the messages convey. You want to prevent serious problems in any financial part of your life. Still, you can take action without getting taken.
First, if you get one of these messages, try to determine whether it's a hoax. Typos and misspellings are often tip-offs to fraud. You might wish to consult urban myth directories such as snopes.com.
If you're still not sure, and the troubling email is from PayPal, for example, don't respond to the message directly. Contact the company on your own, not by clicking on any links in the message itself. Type www.paypal.com into your browser, or look up the company's phone number in a phone directory or on the firm's website. Go to the legitimate source yourself, instead of letting scammers lure you to a fake and dangerous place.
If you're worried about an alleged IRS communication, call the IRS at (800) 829-1040, or call on the Taxpayer Advocate Service, which exists to help us resolve IRS problems, at (877) ASK-TAS1.
Many entities don't carry out important business by email, for reasons such as this. The IRS may send you a notice by mail, but it's not likely to email you. At MarketWatch.com, columnist Chuck Jaffe tackled this topic, warning that the IRS has actually sold some of its tax receivables to collection agencies for pennies on the dollar. Thus, if you owe tax money, there may actually be a legitimate collector trying to get some overdue money from you. Jaffe explained:
With third parties representing the IRS in some collection matters, there is little doubt that there will be rogue emails trying to fleece consumers. The IRS acknowledged as much in late August, when it warned consumers not to be duped by scammers posing as private debt collectors. Delinquent taxpayers whose cases actually have been sent to the private collection agents will get letters. The first will be from the IRS -- the agency does not communicate with taxpayers via email, so any email purporting to be from Uncle Sam is a fraud -- naming the company that is handling the debt. The second will be from the collection agent, saying that the taxpayer will soon be asked to pony up. The letters will detail the amount owed and will remind the recipient that anyone contacted by the private collection firms can insist that only the IRS deal with the account.
Got that? You don't have to deal with the third party; you choose to deal just with the IRS instead.
To glean many more tax tips, pop over to our Tax Strategies Center. You can also commune with others about the load of junk you get in your email inbox every day on our Foolish Viruses, Hoaxes & Spam, Oh My! board.
For more on phishing and other scams, read: