It seems every year, savvy criminals are finding new ways to prey upon unsuspecting taxpayers to cheat them out of money and compromise their personal information. Here are 5 reported tax scams to look out for this season:
1. Data theft from the tax preparer.
The IRS recently warned that criminals are stealing personal information – social security number, dependents, even bank account information – straight from tax preparers’ offices via phishing scams. Once the cyber thief has this info, they file a return on the individuals’ behalf. In some cases, the tax return is deposited into the actual taxpayer’s account, and then the thief poses as a debt collector and contacts the taxpayer to report the money has been deposited in error and should be returned. These schemes are very hard to prevent because all the information presented to the IRS is accurate.
2. Tax professionals who aren’t.
If you’re searching for a professional tax preparer to file your taxes, stay alert for those who promise inflated returns – particularly if that promise comes before they’ve reviewed your paperwork. Also: you should never be asked to sign a blank return, or pay a fee based on the percentage of your refund. It’s best to ask for referrals from friends and family who have worked with a preparer for at least a few years to ensure you are working with a legitimate professional.
3. “IRS” telephone scams.
If you receive a call from someone claiming to be from the IRS, hang up. Period. The person on the other end may sound convincing because they give you supposed IRS identification and mention personal information about you, but it’s all a scam. When you actually owe the IRS money, they won’t call and demand payment. Rather, you would receive an official notice via mail and be given the opportunity to contest whatever amount they claim you owe. You’ll never be asked to write a check or hand over credit card information on the spot. Don’t fall for the call!
You should always be on the lookout for fake emails with links to websites asking you to update your personal information. Clicking on that link could unknowingly download a virus or other software used to steal information off your personal computer. Or, the website you visit – made to look just like the real thing – will capture your info so it can be used to file a fraudulent tax return. Keep in mind that, in most cases, websites that house your info would not email you with a request to update it.
5. Form W-2 Scam.
One of the most devastating phishing scams lately has been the Form W-2 scam. Criminals use hacking techniques to send an email to company payroll personnel that appears to come from another exec within the company asking for all W-2 records of current employees, and then use that information to file fraudulent tax forms. Companies should alert their employees that such requests should always be questioned in-person to ensure the person who sent the email really did send it.