Everyone’s favorite time of year – tax season – is creeping up on the calendar. Tuesday, April 17, may feel eons away, but the filing deadline will be here before you know it. Tax season is prime time for online scams. According to the Federal Trade Commission (FTC), tax-related identity theft – when a criminal uses someone else’s Social Security number along with other personal data to file an income tax return (and reap any refunds) – is the most common type of identity theft. In fact, a 2017 Identity Fraud Study by Javelin Strategy & Research revealed that nearly one in three consumers notified that their data has been breached become victims of identity fraud. With the recent Equifax cyber attack still fresh in our minds, more than 145 million Americans’ names, addresses, birth dates, Social Security numbers and other sensitive information may be at risk. Cyber criminals are crafty and continuously looking for ways to steal your personal information. The Internal Revenue Service (IRS) indicates that phishing schemes continue to lead its “dirty dozen” list of 2017 tax scams. So what is the average American to do? The National Cyber Security Alliance (NCSA) and the Identity Theft Resource Center (ITRC) have once again joined forces to help consumers keep safe during tax season with tips for identifying cyber scams, actionable online safety steps and what to do if you fall victim to tax identity theft.
SCAMS TARGETING TAXPAYERS
The IRS has a seen a surge in cyber criminal swindles directed at consumers. If you protect yourself against these unscrupulous schemes, your identity and tax return will be safer and more secure.
IRS-IMPERSONATION PHONE SCAMS
Callers claiming to be IRS employees – using fake names and phony IRS ID numbers – may ring you and insist that you owe money and it must be paid as soon as possible through a gift card or wire service. If the call is not picked up, the scammers often leave an emergency callback request message. The real IRS will not call you and demand immediate payment; in general, it will mail you a bill if you owe money.
MARKED INCREASE IN PHISHING, EMAIL AND MALWARE SCHEMES
Cybercriminals will try to get you to do something so they can steal your personal information. Watch out for unsolicited emails, text messages, social media posts or fake websites that may prompt you to click on a link or to share valuable personal and financial information. Armed with this information, online thieves can pilfer funds and/or commit identity theft. And unfamiliar links or attachments can contain malware – viruses, spyware and other unwanted software that gets installed on your computer or mobile device without your consent – which can infect your computer files if opened.
FRAUDULENT TAX RETURNS
The FTC strongly recommends trying to file your tax return as soon as possible. The IRS only accepts one tax return per Social Security number. If the file is yours and it’s in early, it becomes impossible for a fraudster to submit another return with your personal information. It’s also important to always use smart practices with your personal information. Remember to only share your Social Security number when it’s absolutely necessary. Check your credit report regularly for shady activity, and never throw papers with critical information – like your Social Security number or bank account information – in the trash. It’s best to shred all paper containing personal data.
TAX PREPARER FRAUD
The overwhelming majority of tax preparers provide honest services, but some unsavory individuals may target unsuspecting taxpayers and the result can be refund fraud and/or identity theft. The IRS reminds anyone filing a tax return that their preparer must sign it with their IRS preparer identification number.