Tax Fraud Red Flags: Warning Signs That Could Save You Thousands
Tax season is a prime time for scammers to target unsuspecting individuals, aiming to steal identities, file fake returns, and drain bank accounts—including yours. Spotting tax fraud early can protect your finances and peace of mind. Below, we’ve outlined the top warning signs to watch for, plus practical steps to take if you notice them. As your trusted banking partner, we’re here to help you stay secure this tax season and beyond.
1. Unexpected IRS Notices
Receiving an IRS letter about a tax return you didn’t file is a major warning sign. Fraudsters may have used your Social Security number to submit a return and claim a refund in your name. The IRS will never email or text you about tax matters—official notices always come by mail.
What to Do:
- Contact the IRS immediately at 1-800-829-1040.
- File an Identity Theft Affidavit (Form 14039) to report fraud.
- Check your IRS account online to see if a return has been filed under your name.
2. Rejected Tax Returns
If you file your taxes and get a rejection notice stating that a return has already been submitted with your Social Security Number, fraud is likely to blame. This often happens when scammers file a fraudulent return before you have had the chance.
What to Do:
- Contact the IRS and provide documentation to prove your identity.
- File a paper tax return if instructed to do so.
- Monitor your credit report and financial accounts for any further suspicious activity.
3. Unusual Bank Account Activity
If you notice unauthorized deposits, withdrawals, or attempts to open new accounts, scammers may be trying to redirect your tax refund or access your financial information.
What to Do:
- Notify your bank immediately and freeze any affected accounts.
- Set up fraud alerts with your bank and credit bureaus.
- Consider enrolling in identity theft protection services for additional monitoring.
4. Phone Calls or Emails Claiming to be from the IRS
Scammers often impersonate the IRS, demanding immediate payment or personal information. They may threaten arrest, lawsuits, or asset seizure if you don’t comply.
What to Do:
- Hang up immediately—the IRS will never call, email, or text you demanding payment.
- Report the scam to the Treasury Inspector General for Tax Administration (TIGTA) at www.tigta.gov.
- Never provide your Social Security number or bank details over the phone.
5. Surprise Wage Garnishments or Tax Liens
If your employer notifies you of a wage garnishment for unpaid taxes that you didn’t know about, it could mean someone has committed fraud in your name. Similarly, discovering a tax lien against you that you didn’t expect is a red flag.
What to Do:
- Contact the IRS to verify your tax records.
- Obtain a copy of your IRS transcript to review any fraudulent activity.
- Work with a tax professional to correct any false claims made in your name.
How to Stay Safe from Tax Fraud
- File early: The sooner you submit your tax return, the less time fraudsters have to file in your name.
- Use secure methods: File electronically through trusted tax preparation software or with a professional.
- Monitor your accounts: Regularly review your bank and credit card statements for unauthorized activity.
- Set up ID Theft Aid: With a Perks Checking or First Rate Checking Account, you receive ID Theft Aid for no additional cost. Just log into your BaZing Account and click ‘Credit & Identity Monitoring’ to get started.
- Enable alerts: Set up fraud alerts with your bank and credit monitoring services. Utilize Notifi Real-Time Alerts to stay on top of your First State bank accounts.
- Keep personal information private: Never share sensitive tax details over the phone, email, or social media.
We’ve Got Your Back
Tax fraud can cost you time, money, and stress—but you don’t have to face it alone. If you suspect trouble, act fast: contact the IRS and First State Bank Nebraska. Our fraud prevention team is ready to assist with account monitoring, freezes, and recovery support. Together, we can stop scammers in their tracks and keep your finances secure.
Need Help?
Stop by or contact your local branch for personalized fraud prevention tips and banking solutions tailored to you.
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