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Credit Repair Cost: What You Can Expect and What You Can Avoid

February 20th, 2018 · Credit Repair

Credit Repair Cost: What You Can Expect and What You Can AvoidIf credit repair cost has you thinking twice about the process, get ready to feel much better about it. When you repair your credit yourself, the expense is far more manageable than you might think. Though there are costs ranging from the price of postage to paying off debt, you do not need to pay for credit repair services or some other things associated with the process. Get the facts about expenses you can expect and ones you can avoid.

Costs you can expect

Mailing credit repair letters

If you have bad credit, it is because of negative listings on your credit reports. So, a critical step in the credit repair process is identifying these negatives and doing what you can to address them through credit repair letters. In some cases, this may mean having an inaccurate listing removed. In other cases, it may mean negotiating a settlement for old debt.

We have free templates you can tweak to your specific circumstances, so you need not pay anyone to write these letters for you. In fact, the only cost associated with this step is the price of printing out the letters and mailing them to the appropriate recipients.

It is recommended that you send your credit repair letters via Certified Mail with Return Receipt so that you have proof of when they are received. This comes to a total of $6.67 per letter. That’s $3.45 for Certified Mail, $2.75 for the Return Receipt (green card you get back confirming when they received it), and $.47 for the regular cost of first class mail. Add $.21 for each additional ounce added by supporting documents.

As for the type of credit repair letter you use, it will depend on the nature of the listing, but common examples include:

*Note, the credit bureaus offer online credit dispute options. Don’t do it. Mail your letters so that you create a paper trail.

Find links to other credit repair letter templates here.

Paying down debt

The amount you owe represents 30 percent of your FICO Score. This includes:

  • How much you owe on all accounts
  • How much you owe on different types of accounts
  • Credit utilization ratio on revolving accounts (e.g., credit cards)
  • How many accounts have balances
  • How much you still owe on installment accounts (e.g., mortgage, auto loan, student loan, etc.)

This makes it very important to pay down your debt as soon as possible.

Your financial situation will determine just how aggressive you can get with paying down this debt. Obviously, you want to make all of your installment loan payments as agreed and stay current on your credit cards. Beyond that, though, you should use the debt snowball or avalanche method to pay off outstanding credit card debt completely.

Once you’ve returned your credit card balances to zero, keep it that way. This is not to say that you shouldn’t use your credit cards; only that you should only charge as much as you can afford to pay back right away. And, at the very most, you should never use more than 10 to 30 percent of your available revolving credit at a time.

Settling old debt

Collections and charge-offs for unpaid debt are among the most damaging of listings you can have on your credit reports. Fortunately, it is possible to negotiate a pay for delete, which means exactly what it sounds like: in exchange for paying what you owe, they remove the associated listing from your reports.

Just one note of caution.

Before you pay any debt to a collection agency, request debt validation and, if it’s several years old, check the statute of limitations first.

If the debt cannot be validated, you are not responsible for it and the associated listing must be removed from your reports. If the statute of limitations has expired, you are not responsible for it, but it will still stay on your reports for up to 7 years. If you are nearing those 7 years, it may be better to wait it out rather than pay the debt.

Learn more with our comprehensive collection of articles on DIY debt settlement.

Getting a secured credit card

Addressing negative listings on your credit reports is only one part of the repair process. Equally important is adding positive credit that will help raise your score. One good way of doing that is through the responsible use of credit cards.

Unfortunately, when you have bad credit, it often comes on the heels of having your credit cards cancelled and charged off. In this case, you may not have any credit cards to use responsibly…and you don’t have the good credit to qualify for one. This is where secured credit cards can be so helpful.

You don’t need good credit to qualify for a secured credit card. What you need is the ability to pay a security deposit that is usually equal to the line of credit they extend to you. After using it responsibly for 12 to 18 months, you will likely be eligible for an upgrade to a regular credit card, at which time your security deposit will be reimbursed.

Get tips on applying for a secured credit card and how to use it wisely.

Managing credit freezes

After all the hard work of repairing your credit, the last thing you want is for an identity thief to come along and undo all of your hard work. Thus, the importance of credit freezes to keep anyone from opening an account in your name.

In the wake of the Equifax hack, it is recommended that you keep credit freezes on your credit reports indefinitely. The cost of this varies. Placing the freeze is free if you are a victim of identity theft. Some states also offer free credit freezes under certain circumstances. Otherwise, you should expect the cost of a freeze to range from $3 to $15, depending on where you live.

Just keep in mind, this is per freeze, which you will need to place with all of the credit bureaus, including Equifax, TransUnion, Experian, and Innovis. Note, however, you can place a free credit freeze on your Equifax credit report until June 30, 2018).

In addition to the potential cost of placing the freeze, you may also need to pay to have it lifted when you want to apply for new credit. Because the freeze not only prevents other people from opening credit in your name; it prevents the same for you, too. The only way around it is a temporary lift, which you may have to pay for, too.

Costs you can avoid

Paying for credit monitoring

Keeping an eye on your credit is an important part of the credit repair process from beginning to end. You not only need to see your credit reports in the beginning, to know what needs to be addressed. You also need credit monitoring to track how well your credit repair efforts are working. Beyond that, credit monitoring should continue once your credit is improved so that you can act quickly to address errors or identity theft so as to minimize future credit damage.

Fortunately, credit monitoring isn’t something you need to pay for. Yes, there are plenty of companies out there that will charge you for it – including the credit bureaus – but as long as you know the right places to look, you can get the job done for free:


The law entitles you to see your credit reports for free every 12 months. The place to make this request – of Equifax, TransUnion, and Experian – is

2) Credit Karma

There are numerous sites out there that monitor aspects of your credit for free. Unfortunately, your use of these sites is limited if you have credit freezes on your credit reports; many simply will not work if a credit freeze is in place. Credit Karma is an exception.

To sign up for Credit Karma, you will have to temporarily lift any freeze you already have in place so that it can be granted access to your credit. But once the sign-up process is complete, you can reinstate the freeze and Credit Karma will be able to continue monitoring your credit for you.

This free monitoring includes access to your TransUnion and Equifax credit reports, as well as the VantageScores based on these reports.

3) Experian CreditWorks Basic

Since Credit Karma only monitors TransUnion and Equifax, you’ll need something additional for Experian. Fortunately, Experian has its own free monitoring option – CreditWorks Basic, which allows you to see your Experian credit report every 30 days.

4) Credit card issuers

Many are including credit scores in customers’ monthly statements. If you’re not sure whether your credit card issuer does this, or you don’t know where to find your score, give them a call and ask.

The only time we recommend you paying for credit monitoring is if you are getting ready to make a big purchase, on a house or car, for example. In those cases, it’s a good idea to pay to see the specific FICO Scores lenders will see when making those decisions. In those cases, consider the FICO Score 3-Bureau Report ($59.85 for one-time access) or FICO Ultimate ($29.95 a month).

Paying a credit repair company

There is nothing that a credit repair company can do for you that you cannot do for yourself. They do not have special relationships with creditors, or collections agencies, or credit bureaus. What they do have are fees – money you could be putting toward paying off debt instead.

That said, if you have zero interest in learning how to repair your credit on your own, you may be considering a credit repair company anyway. At the very least, do your homework first. Get the facts about what to expect from a credit repair company, including how their fees work.

Paying a debt relief company

As with credit repair companies, there is nothing a debt relief company can do that you cannot do yourself. Learn how to DIY.

Paying for credit counseling

While credit counseling agencies do have services you can pay for, they also have plenty of free help that won’t cost you a thing. Any reputable credit counseling agency will offer a free initial consultation, free information and resources, and free workshops and classes.

It’s only if you set up a debt management plan through them, or seek bankruptcy counseling, that a credit counseling agency will charge you. And these are both options that should only be entered into after considerable deliberation.

The best way to minimize credit repair expenses?

Do your homework and do it yourself. Sure, it may feel overwhelming and intimidating at first. But credit repair is actually pretty straight-forward. It’s just a matter of delving in and committing yourself to the process. This comprehensive guide will walk you through it every step of the way.

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Credit Unions: How They Work & How to Join (It’s Easier Than You Think)

February 6th, 2018 · Banking

Credit Unions: How They Work & How to Join (It's Easier Than You Think)All the hype you’ve heard about credit unions is well-earned. It’s the reason we’ve seen growth at more than three times the rate of credit activity among consumers of other lender types. And it’s the reason you need to know how credit unions work and how to join one, which is easier than you might think. Whether it’s better customer service you’re looking for, or better chances of getting a loan when you’re trying to repair your credit, get the facts about how a credit union could be just what you need.

How credit unions work

What’s the difference between a credit union and a bank?

The main difference lies in the bottom line. Banks have to answer to investors. Credit unions are owned by its members (i.e., customers). It is this distinction that enables credit unions to be more community-focused, making decisions that put people over profits.

Specifically, credit unions differ from banks in:

  • What happens to the profits. Banks give them to investors; credit unions pass profits on to members in the form of better fees and interest rates.
  • How they are insured. Both are insured, but differently – FDIC vs. NCUSIF or private insurance.
  • How you open an account. Any bank will take you (provided your ChexSystems report checks out). Credit unions require membership based on you meeting certain qualifications relative to your affiliations.
  • Where you go for in-person transactions. You can use any of a bank’s numerous locations. A credit union have may just one location, but you can stop into any one of many credit unions that are part of its network.
  • Fees and interest rates. You’ll typically pay less and earn more through a credit union.
  • Qualifying for a loan with bad credit. It’s a challenge either way, but going through a credit union increases your chances, as the decision-making process involves real people and isn’t limited to computers.

For details, see answers to related questions below.

Are credit unions FDIC insured?

No, credit unions are not FDIC insured like banks. However, federally-insured credit unions have the same amount of insurance through the National Credit Union Share Insurance Fund (NCUSIF) – up to $250,000 per account holder.

There are two ways that you can know whether a credit union is federally-insured:

  • It has “federal” in its name
  • It is located in Arkansas, Delaware, South Dakota, Wyoming, or the District of Columbia where all credit unions are all federal

If the credit union does not meet either of those two criteria, it is probably state-chartered and should have some level of state-mandated private insurance.

Are credit unions non-profit?

Yes, credit unions are non-profit, but that does not mean they are charitable organizations. They simply don’t have investors to whom they need to show a profit. Instead, credit unions are owned by the members themselves. Any profits made benefit its members via better interest rates and fees.

Of course, it’s also possible for a credit union to pass profits on to members in the form of bonuses. That’s what Erie Federal Credit Union did, paying $550,000 out to its members, with individual bonuses ranging from a few dollars to $900.

How do you find a credit union?

You can search online via:

You should also check to see if there is a credit union associated with your employer or any organization you are affiliated with. You could also try your local chamber of commerce, Better Business Bureau, and, of course, family and friends who may be able to point you in the right direction.

Can anyone join a credit union?

Each credit union has its own eligibility requirements that determine who can join. It’s called their field of membership or FOM. This makes people think twice about credit unions, assuming they won’t meet the criteria, but there are some pretty wide-ranging qualifications, so you might be surprised.

You could be eligible based on your:

  • Employer
  • Location
  • School
  • Religion
  • Professional affiliation
  • Community
  • Civic/social groups

You could even qualify based on the associations of your family members, so it’s worth doing your homework. Some credit unions even allow you to join simply for making a donation to a specific charitable organization.

Also, keep in mind that once you are a member of a credit union, you can stay a member for life. That means there’s no need to worry about your eligibility changing – when you leave a particular employer or school – and you having to find a new credit union to join; once you’re in, you’re in.

Which credit unions allow you to join just for making a charitable donation?

The list is surprisingly long. As reported by Time, you can join:

  • Alliant Credit Union for making a $10 donation to Foster Care to Success
  • DCFU Financial for making a $60 donation to the Henry Ford Museum
  • Digital Federal Credit Union for paying a $10 membership fee to join one of eight participating organizations
  • ESL Federal Credit Union for paying a $55 membership fee to join the George Eastman Museum
  • First Tech Federal Credit Union for making an $8 donation to the Financial Fitness Association or a $15 donation to the Computer History Museum
  • Golden 1 Credit Union for making an $8 donation to the Financial Fitness Association
  • Kinecta Federal Credit Union for paying a $10 membership fee to join the Consumers Cooperative Society of Santa Monica
  • Lake Michigan Federal Credit Union for making a $5 donation to the ALS Association
  • Michigan State University Federal Credit Union for making a $35 donation to the Michigan United Conservation Clubs
  • Pentagon Federal Credit Union for making a $14 donation to Voices for America’s Troops or a $15 donation to the National Military Family Association
  • Redstone Federal Credit Union for making a donation to one of 15 participating organizations
  • San Diego County Credit Union for making an $8 donation to the Financial Fitness Association
  • United Nations Federal Credit Union for paying a $10 membership fee to join Kilimanjaro Initiative USA or $25 to join the United Nations Association of the United States of America
  • Wings Financial Credit Union for making a $5 donation to the Wings Financial Foundation

Learn more about each of these options.

What credit unions are part of shared branching?

Unlike the big banks, credit unions don’t have branches all over the world. That would make visiting a credit union downright impossible when you are traveling or if you move out of the area. Enter shared branching – the networking of multiple credit unions that allows you to make transactions in any one of the networked branches or ATMs.

Most credit unions are part of a shared branching network, also called CU Service Centers. Search for them via

How do you open a credit union account?

It’s a similar process you would go through in opening an account through a bank:

  • Choose a credit union. Again, there are eligibility requirements, but you can sort through your options pretty efficiently through the websites listed above.
  • You’ll be asked for the same type of personal information and identification you’re asked for when you open a bank account.
  • Make a deposit into a share account (i.e., savings account). This is required of all members, with minimums ranging from $1 to $50

Credit union services

What services do credit unions offer?

You should expect the same kind of services from a credit union that you would from a bank – checking, savings, loans, cashier’s checks, certified checks, money orders, wire transfers, safe deposit boxes, notary services, and certificates of deposit (which credit unions call share certificates). Credit unions are even getting more sophisticated with online services and apps comparable to banks.

Can credit unions have business accounts?

Yes, credit unions do offer business accounts.

Credit union loans

What type of loans do credit unions offer?

It depends on the credit union, but types of loans offered may include:

Just be sure to shop around. Though credit unions typically offer good terms, it’s still worth double-checking. Look at other credit unions and banks, and compare rates on sites like Bankrate and Nerdwallet.

What are credit union interest rates?

Interest rates will vary from one credit union to the next, but in general, you should expect them to be a little better than interest rates offered by banks.

Will credit unions work with bad credit?

It depends on various factors but, in general, yes – despite bad credit, credit unions may extend a loan to you that a traditional bank will not.

As we reported in How Credit Unions Help Rebuild Bad Credit:

“Unlike banks, credit unions are non-profit organizations owned and operated by their members who democratically elect a Board of Directors. For this reason, the decisions made regarding the credit union take into consideration your best interest, unlike banks that are always looking out for their own best interest (i.e., the bottom line).

“For this reason, credit unions are more forgiving of bad debt — including bankruptcy — making it easier for you to get a credit card or auto loan than it would be through a traditional bank.”

Just keep in mind, there is no guarantee. Whether you qualify for a loan will depend on the credit union, your relationship with them, just how bad your credit is, employment, income, and down payment (if applicable).

Still not convinced?

Millennials are. Find out why they’re driving credit union growth.

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Tax Scams: What You Need to Know About the Latest Schemes

January 23rd, 2018 · Consumer Info, Taxes

Tax Scams: What You Need to Know About the Latest SchemesWhat if you filed your tax return only to discover that it had already been filed? Since filing your taxes isn’t something you’re likely to have forgotten doing, it’s safe to say someone else filed your tax return in your name and had your refund sent to them. This is just one of many tax scams you need to know about. We’ve compiled a comprehensive list of them based on the most recent IRS tax scam alerts. The goal? To protect your money, of course, but also to protect the sensitive information that fraudsters could use to commit identity theft against you for years to come, and leave you in desperate need of credit repair. Take a look at how the latest tax schemes work, how to protect yourself, and what to do if you are targeted by one of these scams.

Posing as IRS representative via phone

If you get a phone call from someone saying they are an IRS representative seeking payment, chances are good they’re lying. That’s because the IRS sends tax bills via regular mail through the U.S. Postal Service. Phone calls are rare and, even if they do call you for some legitimate reason, the IRS would not demand that you provide immediate payment or sensitive personal information over the phone. Plus, you would probably have received multiple letters in the mail first, so a phone call from the IRS should not come out of the blue.

How the scam works


  • Do their homework on you, compiling enough information to convince you of their legitimacy
  • Manipulate caller ID so that it appears you are, indeed, receiving a call from the IRS
  • Use a fake name and ID badge number
  • Demand immediate payment of your supposed tax bill (including the bogus Federal Student Tax, which is not a thing) with no opportunity to appeal
  • Say that you must pay by prepaid card, gift card (like iTunes), or wire transfer
  • Use hostile and insulting language with you
  • Threaten you with arrest, or deportation, or the suspension of your business or driver’s license

On the flip side of this scenario, fraudsters may say that the IRS actually owes you money in the form of a tax refund. In order to process the refund, they say you need only verify personally-identifying information that they provide to you. Again, they do their homework, so they may have enough detailed info to convince you that they are, indeed, the IRS.

In either case, should you not answer the phone call, these fraudsters may leave a message urging you to call them back to deal with the “urgent” matter.

Note, it may not be a live person calling you. Some tax scams involve robocalls – automated messages stating you owe money and must call back immediately to take care of it or risk legal action.

Posing as IRS representative (or tax preparer) via email or text

While there is an off-chance that a real IRS agent could call you, there is zero chance of you receiving an email or text from them. That’s because the IRS never contacts taxpayers via either of these methods. So, if you do receive an unsolicited email or text from someone claiming to be an IRS representative, you can be certain it is a scam.

Unfortunately, there is no such clear-cut deciphering if they send an email or text posing as your tax preparer, so beware.

How the scam works


  • Make their emails and texts to you seem as legitimate as possible (e.g., using the IRS logo)
  • Request information from you (e.g., updating your IRS e-file)
  • Include links in these emails or texts that direct you to an official-looking website that is actually a mirror site of the actual IRS site
  • Steal the requested information that you input into this mirror site
  • Infect your computer with malware

Examples of specific email scams:

Hotmail scam. The subject lines reads, “Internal Revenue Service Email No. XXXX | We’re processing your request soon | TXXXXXX-XXXXXXXX.” Inside the email, you are directed to a fake Microsoft page that asks for personal information.

IRS/FBI ransomware scam. Emails include both the IRS and FBI emblems. You are instructed to click a link to download an FBI questionnaire – a questionnaire that is fake. Clicking the link installs malware onto your computer, only instead of stealing your information or spying on your keystrokes, it locks your computer and demands you pay a ransom to release it (a ransom that the IRS says you should not pay).

Tax preparer/tax software company scam. Emails say they are from your tax professional or tax software company requesting more information needed to file your taxes. If you provide this information, it can be used to file fraudulent tax returns.

Posing as company executive requesting W-2 forms from payroll or human resources

If someone gets their hands on your W-2, they could file a fraudulent tax return in your name, as it contains everything necessary to do so – your name, address, social security number, income, and withholding information. Then instead of the refund going to you, the fraudster has it sent to them. Thus, the devastating implications of a tax scam in which fraudsters get their hands on the W-2 forms of an organization’s entire workforce.

How the scam works

Form W-2 tax scam fraudsters:

  • Get the names of people in positions of authority at companies, non-profits, schools, hospitals, etc.
  • Use business email compromise (BEC) or business email spoofing (BES) to send emails posing as these people in positions of power
  • Send these emails to people in payroll or human resources
    • First it may be an email just saying hello, to establish contact
    • Then it may be a follow-up email asking for the W-2 forms of every employee
  • After receiving the W-2 forms, may follow-up with a request for a wire transfer
  • File the fraudulent tax return (or sell the information for other fraudsters to do so)

What’s worse is, the IRS says it may be days, weeks, or even months before such a scam is detected.

Posing as Taxpayer Advocacy Panel member

The Taxpayer Advocacy Panel (TAP) is a volunteer board that advises the IRS on various issues. The advisory role of these volunteers does not include any access to taxpayer information. So, if you receive an email from someone claiming to be a representative of the panel – someone who says you have a tax refund coming to you – you can be certain it is a scam.

How the scam works

Fraudsters posing as members of the Taxpayer Advocacy Panel may:

  • Send you an email stating that you have a tax refund coming to you
  • Ask you to provide them with the information necessary for you to receive the refund
  • Use the information provided to commit fraud against you

Scams targeting tax professionals

Posing as e-Services representative

e-Services is a set of online tools that tax professionals use to complete their transactions with the IRS – tools only available to tax professionals who have been approved by the IRS to use them. Unfortunately, fraudsters exploit this relationship in the form of a phishing scam.

How the scam works

e-Services tax scam fraudsters:

  • Send an email posing as a representative of e-Services
  • State in the email that the tax professional needs to sign a new user agreement
  • Warn the recipient that if they do not sign the agreement, they will lose access to e-Services
  • Direct the tax professional to a fake site where they are asked for information
  • Steal passwords and data they can use to commit tax fraud

A variation on this scam is one in which the fraudsters – again, posing as e-Services reps – ask tax pros to update e-Services portal information and Electronic Filing Identification Numbers (EFINs). They are instructed to click on an included link to update this information; they are taken to a fake site that is used to steal their username and password.

Posing as software providers

Tax professionals depend on tax preparation software; without it, they cannot do their jobs. Thus, the effectiveness of a scam that tells tax pros that access to their tax software is locked.

How the scam works

Software provider tax scam fraudsters:

  • Send an email posing as a representative of a tax preparation software company
  • State in the email that the tax pro’s access to the software has been locked “due to errors in your security details”
  • Instruct them to click on an “unlock” link included in the email
  • Take them to a fake website where they are asked for their username and password
  • Use their username and password to access the tax pro’s client information

A variation on this scam is one in which fraudsters send emails – again, posing as tax prep software representatives – saying the recipients need to click a link to download a software update. Only, instead of an update, it is actually malware that tracks keystrokes.

Posing as potential client

While tax professionals may get new clients from walk-ins or phone calls, they also rely on email. Unfortunately, fraudsters take advantage of this, posing as potential clients so as to infiltrate the tax professional’s computer system.

Potential client tax scam fraudsters send bogus emails to tax preparers. Examples include:

  • “Happy new year to you and yours. I want you to help us file our tax return this year as our previous CPA/account passed away in October. How much will this cost us?…hope to hear from you soon.”
  • “Please kindly look into this issue, A friend of mine introduced you to me, regarding the job you did for him on his 2017 tax. I tried to reach you by phone earlier today but it was not connecting, attach is my information needed for my tax to be filed if you need any more Details please feel free to contact me as soon as possible and also send me your direct Tel-number to rich (sic) you on.”
  • “I got your details from the directory. I would like you to help me process my tax. Please get back to me asap so I can forward my details.”

If the tax professional responds, a second email follows with a link or attachment that the fraudster says contains their tax info. That’s a lie, of course, instead installing malware on their computer that can be used to access data or take over control of the computer.

Posing as existing client

This is a last-minute tax scam that tax professionals need to be on the lookout for the closer it gets to the April tax-filing deadline.

How the scam works


  • Send emails to tax preparers that claim to be from clients
  • Request in these emails a change to how the client’s refund will be received
  • Count on the tax preparer making the change without a follow-up phone call to confirm
  • The fraudster receives the refund, not you

What you need to know about the IRS

The IRS will NOT:

  • Contact you by phone without sending you notices in the mail first
  • Communicate with you via email or text
  • Demand that you make immediate payment over the phone
  • Demand that you make payment without giving you an opportunity to appeal
  • Ask you to share debit or credit card numbers over the phone
  • Insist that you make a payment via prepaid card, gift card, or wire transfer
  • Threaten to have you arrested or deported, or to have your business or driver’s license suspended or revoked

How to protect yourself

For individuals

Don’t open links in suspicious-looking emails or texts.

Don’t just pay an unexpected tax bill; call the IRS to verify the debt using the phone number listed on the official IRS website.

Even if you know that you owe the IRS money, don’t assume that a call, email, or text you receive from someone saying they’re from the IRS is legitimate. Again, call the IRS using the number listed on the official IRS website.

Keep in mind that fraudsters may try and scam you via regular mail, too. So if you receive an unexpected or suspicious-looking letter, call the IRS to confirm it’s legitimacy: 1-800-829-1040.

If your computer is infected with ransomware, don’t pay it. There is no guarantee they will unlock your computer as promised.

Familiarize yourself with what your tax professional should be doing to protect against fraud.

For tax professionals

The IRS recommends that tax professionals familiarize themselves with Publication 4557, Safeguarding Taxpayer Data. For instance, tax pros should not communicate with clients via email alone, especially when any special request is made by the client via email; they should always follow up with a phone call.

For employers

To guard against the W-2 tax scam, the IRS recommends the following: “In addition to educating payroll or finance personnel, the IRS and Security Summit partners also urge employers to consider creating a policy to limit the number of employees who have authority to handle Form W-2 requests and that they require additional verification procedures to validate the actual request before emailing sensitive data such as employee Form W-2s.”

What to do if it happens to you

If you receive a fraudulent IRS email or text, don’t click on any links or reply to it. Forward it to then delete the original email. You should also alert the Treasury Inspector General for Tax Administration.

If you receive a phone call from someone who says they’re with the IRS, take down the caller’s information – name, badge number, call back number, and caller ID. Hang up and then call the IRS directly at 1-800-366-4484 to verify the caller’s identity. If it cannot be verified, report it to and alert the Treasury Inspector General for Tax Administration.

If you receive an unexpected or suspicious IRS letter, call the IRS at 1-800-829-1040 to confirm its validity. If it is a fake, report it to and alert the Treasury Inspector General for Tax Administration.

If you are a tax professional targeted by one of these scams, follow the instructions in Data Theft Information for Tax Professionals.

If your organization falls victim to the W-2 scam, email with “W-2 Data Loss” in the subject line. Organizations that were targeted in this scam, but did not fall victim to it, are advised to email with “W-2 Scam” in the subject line. See details about what to include in the content of these emails.

Learn more about identity theft.

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