After a cold winter, spring is finally upon us. You may be looking forward to warmer weather, outdoor events, and the beginning of baseball season. But protecting yourself from tax fraud?
See, the arrival of spring signals the arrival of an important financial season as well: tax season. As you know, U.S. taxpayers are required to file their yearly taxes by April 15.
Tax season is nothing to be afraid of. Many people can find the process confusing. Unfortunately, the high-stakes nature of paying taxes has caused scammers to capitalize on the uncertainty that people feel. During tax season, cyber criminals are more likely to attempt to scam you with tax-based intimidation or identity fraud.
What might these scams look like? A few common red flags to keep an eye out for:
- Cyber criminals may call you pretending they are the Internal Revenue Service (IRS) and demanding you pay your taxes right away or they will arrest you.
- A cyber criminal may send you a phishing email explaining that your taxes are overdue, and you must go to a website or open an attachment to process your taxes.
However, there are several security steps you can take to protect yourself from these kinds of attacks. By following safe online practices and the below steps, you can stay ahead of scams and avoid falling victim to these cyber criminals.
File Your Taxes Early
One of the best ways to avoid cyber crime attacks is by filing your taxes as soon as possible. The earlier you do it, the more secure you can feel that you’ve done your job correctly.
It also lessens the opportunities for scammers to steal your identity or tax refund. The IRS only allows one tax return per Social Security number per year. By filing your return early, you’re preventing a criminal from using your Social Security number before you do.
These cyber criminals often strike early in tax season in the hopes that their would-be victims haven’t yet filed. Although April 15 is only a month away now, it’s still better to file your taxes as soon as possible. And for future years, remember that you can usually begin to file as early as the last week of January.
Understand the IRS Practices
Though the IRS has come a long way in preventing data theft, identity fraud and criminal tax activity, it’s almost impossible to stop all tax-related crime. According to a report by the Treasury Inspector General for Tax Administration, the IRS identified $10.1 billion in fraudulent returns in 2018. Of this amount, they were able to stop the issue of $9.6 billion.
Just like you don’t want to be the victim of a scammer, the IRS wants to make sure you understand their practices in order to protect you. On the IRS Consumer Alerts webpage, they make it clear: The IRS only interacts with consumers in certain ways.
“The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information.” —IRS.gov
Also, the IRS would like you to take note: They initiate most contact through regular mail delivered by the U.S. Postal Service. In certain circumstances, they may call or come in person to a home or business, but this will generally be after several notices delivered by mail.
How can you know if you’re really interacting with an IRS representative? Any IRS representative will provide two forms of official credentials. They'll share a pocket commission and a HSPD-12 card. This card is an official identification for federal employees, and you will always have the right to ask for and see these credentials.
To learn more about how to properly identify an IRS professional, read this information from the IRS.
Don’t Click to Protect Yourself During Tax Time
If you do receive communication in the form of text messages or emails, the best thing to do is simple: don’t click. According to Forbes, this year, scammers have been sending fake tax forms to taxpayers via email.
These forms may be designed to look similar to legitimate tax preparation services such as TurboTax. Some scammers may email PDFs of seemingly-authentic tax forms that have been altered to ask for more personal information, such as your mother’s maiden name or your passport number.
Remember: The IRS will never contact you via email. If something doesn’t seem right, assume it’s a scam. You can always contact the IRS if you aren’t sure. It’s better to be safe than sorry.
Report Suspicious Activity
Another step you can take to prevent the spread of identity fraud and scammers during tax season is to report anything that seems suspicious.
If you receive a suspicious email, be sure not to click on any links or attachments. Then, you can forward the email to firstname.lastname@example.org in order to report it. Using that same email, you also can report telephone calls from entities claiming to be from the IRS. Include all information about the fraudulent telephone call in your email, and use the subject line “IRS Phone Scam.”
If you receive a suspicious tax-related text message, you can report it by forwarding the original message to (202)-522-1226, taking care not to click on any links or attachments.
While it may be frustrating and annoying to be targeted by tax scammers, reporting it can make a difference. You may be able to help yourself and others avoid being the victim of a future tax scam.
Stay Alert All Year, This Tax Year and Beyond
The unfortunate reality is that cyber criminals will probably always exist, no matter what time of year it is – whether it’s tax season or not.
By staying informed about safe online practices and remaining vigilant at all times, you can avoid becoming an easy target for scammers.
Learn more financial security tips and how Academy Bank works to keeps your accounts secure.