tax fraud

It’s the time of year for Tax Fraud! As people file their tax returns, cybercriminals target them with a variety of scams. Some people learn they are victims only after having their legitimate tax return rejected because scammers already fraudulently filed taxes in their name. According to the Internal Revenue Service (IRS), there was a 60% increase in 2018 in phishing scams that tried to steal money or tax data. So how can you prevent being scammed?

The most common way for cybercriminals to steal money, financial account information, passwords, or Social Security Numbers is to simply ask for them. Criminals send phishing messages often impersonating government officials and/or IT departments. They may tell you a new copy of your tax form is available. They may include a link in an official looking email that goes to a website that uses an official organization’s logo and appears legitimate, yet is fraudulent. If you attempt to login on the false website, or provide any personal information, the criminals see what you type and try to use it to compromise your accounts and file a false return in your name.

Much of your personal information can be gathered online from sources like social media or past data breaches. Criminals know this, so they gather pieces of personal information from a variety of sources and use the information to file fake tax refund requests. If a criminal files a tax return in your name before you do, it can be a tough process of proving that you did not file the return and subsequently correcting the return.

Criminals also impersonate the IRS or other tax officials, demanding tax payments and threatening you with penalties if you do not make an immediate payment. Whether through websites, emails, or threatening calls and text messages, these contacts may seem legitimate but are not. Sometimes, criminals request their victims to pay “penalties” via strange methods like gift cards or prepaid credit cards.

It is important to remember that the IRS will not:

• Initiate contact by phone, email, text messages, or social media without sending an official letter via US Mail first.
• Call to demand immediate payment over the phone using a specific payment method such as a debit/credit card, a prepaid card, a gift card, or a wire transfer.
• Threaten you with jail or lawsuits for non-payment.
• Demand payment without giving you the opportunity to question or appeal the amount they say you owe.
• Request any sensitive information online, including PIN numbers, passwords or similar information for financial accounts.

How can you protect yourself from tax fraud?
• File your taxes as soon as you can…before the scammers do it for you!
• Always be wary of calls, texts, emails, and websites asking for personal or tax data, or payment, and verify contact organizations through their publicly-posted customer service line. If they contact you end the call and call the organization at the phone number on their website.
Don’t click on unknown links or links from unsolicited messages. Type the verified, real website address into your web browser.
• Don’t open attachments from unsolicited messages, as they may contain malware.
• Only conduct financial business over trusted sites and networks. Don’t use public, guest, free, or insecure Wi-Fi networks.
• Use strong, unique passwords for all your accounts and protect them. Reusing passwords between accounts is a big risk that allows a breach of one account to affect many of them!
• Shred all unneeded or old documents containing confidential and financial information.
• Check your financial account statements and your credit report regularly for unauthorized activity. Consider putting a security freeze on your credit file with the major credit bureaus. This will prevent identity thieves from applying for credit or creating an IRS account in your name.

If you receive a tax-related phishing or suspicious email at work, report it according to your organization’s cybersecurity policy. If you receive a similar email on your personal account, the IRS encourages you to forward the original suspicious email as an attachment to its phishing@irs.gov email account, or to call the IRS at 800-908-4490.

If you suspect you have become a victim of tax fraud or identity theft, the Federal Trade Commission (FTC) Identity Theft website provides a step-by-step recovery plan. It also allows you to report if someone has filed a return fraudulently in your name, if your information was exposed in a major data breach, and many other types of fraud.