During the past few years, we have seen an influx in tax related scams affecting consumers. Here’s how to protect yourself from the most common IRS tax scams.
The IRS is renewing its information on frequent and common tax scams, providing multiple newsletters to taxpayers urging them to beware the signs of a tax-related con, especially during the pandemic.
The IRS is part of a coalition of state and national tax community members called the Security Summit, focusing on disseminating helpful security tips to taxpayers and businesses looking to protect their personal information, and prevent IRS tax scams and identity theft.
IRS Tax Scams to Avoid
In addition to the latest Dirty Dozen scams, below are a few common tax-related scams, as well as important tips for self-defense both online and via the phone.
1. Tax-Related Identity Theft
Identity theft is still one of the most common and most dangerous tax-related scams that fraudsters run.
The purpose of utilizing someone’s personal tax info to masquerade as them is usually to collect on tax refunds and unemployment benefits, as well as other benefits. Scammers may also use your Social Security number to file a fraudulent tax return in your name, or claim your dependents on a tax return of their own.
You may have been a victim of a case of tax-related identify theft if the IRS notifies you about a suspicious tax return, or if you cannot e-file your return because one has already been made with your Social Security number. Keep in mind these are only a few of the signs of identity theft.
2. IRS Phishing
Phishing is the act of extracting sensitive information from a victim online by setting up a fake form or log-in screen. Phishing attempts will generally copy the design or look of an official IRS webpage or form, but there are a few obvious ways in which you can distinguish a phishing attempt from the real deal.
First – check the address of the sender. Most phishing attempts occur over email, and most email services successfully weed out obvious scammers. But if you do receive an email from what seems like the IRS, double- and triple-check the sender’s address to see whether they’re really sending an email from the IRS’s email servers.
Next, look for obvious discrepancies in the email itself. Phishing mails will often feature odd typesetting, misspelling, graphical errors, or contents that make no sense.
Finally, the most obvious clue – the IRS never asks for your information via email. Any email saying you should open the attached file, go to the link on the message, or reply with your log-in information or other sensitive data (including things like your full name, birthdate, and so on) should be ignored, and forwarded to the IRS’s phishing reporting email.
3. Impersonating IRS Personnel
Another common IRS tax scam is a phone call or email wherein the scammer claims to be an IRS employee, demanding that you pay your tax debt. The IRS will never ask you to pay your debt over the phone, nor will they ask for your information via telephone or email. Common ways in which scammers try to extract money from taxpayers for their alleged debt include Google Play gift cards, fake invoices, wire transfers, and escrow payments.
If the IRS wants something from you, they will ask for it via a letter in the mail, not digitally or over the phone. Alternatively, you can request information from the IRS securely over the IRS’s own website. Be sure that you’re on https://irs.gov.
4. Malware and Ransomware
Another common online IRS tax scam is an email from a scammer claiming to represent the IRS, telling you to open the attached file.
Rather than a just form, however, the attachment may be a type of malware that infects your computer and steals information, logs keystrokes, spies on you, utilizes your computer’s resources to mine cryptocurrency, or holds all of your data ransom for an exorbitant cryptocurrency fee.
Tips to Avoid IRS Tax Scams
Tax-related scams are incredibly dangerous. Scammers claiming to be the IRS, or to work with the IRS, can scam people out of their tax refunds, steal their information, sell their sensitive data, or extract financial info from their devices. Be sure to keep yourself safe on the internet by applying the following tips:
1. Read Emails Thoroughly
Scam mails are often too good to be true, clearly suspicious, or demand something from you via mail. Don’t click on any links, don’t open attachments, and don’t do what an email says if you aren’t sure it isn’t a scam.
Double-check the sender info, reread the message for signs of a scam, and get a second opinion from someone online if you aren’t sure. If you receive any emails from the IRS, know that if you’re ever notified of anything important, the IRS will have done so via physical mail.
2. Use Multi-Factor Identification
Multi-factor or two-factor identification utilizes multiple different login cues to enter an account. A common example of two-factor identification is providing your username and password, as well as a security code texted to the phone number associated with your account. This adds an additional layer of security to every login and makes it harder for scammers to access your accounts.
3. Be Stingy with Your Info
Double- and triple-check before you use your information online, especially when asked to login somewhere or provide credit card info to make a purchase. Do not share sensitive information via text, email, phone call, video chat, or over public channels.
4. Use Malware Detection and Security Software
Be sure your antivirus is on, and regularly scan your devices for signs of malware. Keep your malware detection and security software updated at all times.
5. Avoid Logging into Accounts in Public
One of the most glaring examples of cognitive dissonance is use of a public WiFi network to log into a private account, or shop and buy goods. Public WiFi networks are completely unsecured and turn your personal data and information – including your credit card info – into easy pickings for scam artists and hackers who are physically near you.
It’s scarily and trivially easy to sit around a coffee shop and steal data from people nearby by snooping through the phones and laptops of public WiFi users.
The best way to minimize the risk of an attack on your privacy and sensitive financial data is to avoid shopping and logging into any accounts on public networks.
6. Using VPN Services
Additionally, you may want to consider using a VPN service whenever you decide to browse the Internet on public WiFi networks, and via 4G/5G. A VPN or virtual private network is a service that reroutes and encrypts any outgoing traffic from your device.
VPNs help disguise your online identity and encrypt the information you send and receive in real-time. It’s not all roses and rainbows – some VPN services are better than others, some don’t offer real-time protection, and some even sell your data themselves. It’s important to choose a service like this with great scrutiny, if you’re considering it at all.
Protecting yourself and your data online can be incredibly difficult. While the IRS reminds us to be careful of what we do on the Internet, it’s important to keep in mind that the simplest things often have the greatest impact.
Enable multi-factor identification wherever available, only access sensitive information on secure networks, browse on websites with SSL certification (https:// rather than http://), and avoid opening suspicious messages, emails, or strange unidentified links.
If you are in need of tax relief services, call the professionals at Rush Tax Resolution today.