Tax scams are in full swing. Heres how to protect yourself

  • Tax fraud, such as scams involving phone calls, phishing, identity theft and accountants, often picks up early in the tax season, according to the IRS.
  • Phone scams, one of the most prevalent types, have cost victims more than $72 million since October 2013, according to the Treasury Inspector General for Tax Administration.
  • The IRS generally reaches out to taxpayers via mail, not with an unsolicited phone call or e-mail. 

Tax season is in full swing — and that means it’s hunting time for scam artists hoping to rip off taxpayers.

The Internal Revenue Service expects to receive around 150 million tax returns during this filing period, which began Jan. 27 and runs through April 15.

Americans need to remain vigilant to guard against tax fraud, which picks up around this time of year as crooks prey on taxpayers’ anxiety and urgency to file their returns, experts said.

“Attackers will target people when they know there is a topic or some relevance they can attach to. That’s how they establish trust or credibility,” said Tim Sadler, the CEO and co-founder of Tessian, an e-mail security company. “Everybody knows it’s tax-filing season now.”

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Taxpayers lose a substantial amount of money each year to tax scams.

The IRS identified $1.8 billion of total tax fraud during the government’s most recent fiscal year. That encompasses all types of fraud, including some of the most prevalent scams targeting individual taxpayers, such as phone scams, fraudulent tax returns and identity theft.

The good news is that data suggest some hoaxes are declining in prevalence due to stepped-up security efforts from the IRS. But that doesn’t mean criminals are sitting by idly.

“Cyber criminals are endlessly creative,” said Chris Pastizzo, senior vice president of the national tax group at Ayco, a financial-counseling firm owned by Goldman Sachs. “They keep finding new ways to trick people.

“It’s a never-ending battle.”

Luckily, there are concrete steps taxpayers can take to protect themselves not only during this tax season but year-round, as well.

Here are some of the most prominent tax schemes and how to avoid them.

These schemes typically involve a phone call threatening arrest, deportation or license revocation if the victim doesn’t pay a bogus tax bill. They ramp up early in the tax-filing season, according to the IRS.

Scam artists typically make unsolicited phone calls or leave voice mails with urgent callback requests demanding taxpayers shell out cash via wire transfer, prepaid debit card or gift card. Victims also sometimes also fork over sensitive personal information that fraudsters use for nefarious purposes, such as identity theft.

These ploys have cost 14,700 victims a total of more than $72 million since October 2013, according to the Treasury Inspector General for Tax Administration.

Phishing is the digital cousin of phone scams. Perpetrators use e-mails, text messages, websites and social media to bait taxpayers into providing their personal information or clicking a compromised link that can then be used to install malware onto a computer or other device.

“We’ve seen a huge rise in phishing scams that take place,” Sadler said.

Source: https://www.cnbc.com/2020/02/18/how-to-protect-yourself-from-tax-scams-this-filing-season.html

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