Tax identity theft is an easy and lucrative way for criminals to make money. This fast-growing crime accounts for nearly half—45%—of identity theft crimes reported to the Federal Trade Commission.1 Want to get to your tax refund before the bad guys? Follow these tips.
How to avoid tax identity theft scams - problem that won't go away $22.5 Billion: attempted tax refund fraud that was prevented or recovered by IRS - 260,000 Victims - $3.1 Billion lost to fraudulent tax refunds - 400%25 surge in phishing and malware incidents during tax season - What It Is, Tax Identity Theft happens when thieves use stolen Social Security numbers to get tax refunds or jobs. How it Happens, Common ways thieves get your personal information: stolen wallet/purse, phone scams, phishing emails. How to spot phishing emails: poor spelling, grammar, demand payment, claim to be from IRS, mention current events, request personal information, use URLs that don't end in .gov
How to spot phishing calls: Claim to be from IRS, Demand Immediate Payment, Require a Specific Payment Method, Ask for Credit/Debit Card Number, Make Threats - Common scams: These scams happen by phone, email and social media. Fake Bill, scammers present bogus tax bill related to the Affordable Care Act. Verification Scam, Entices victims to confirm SSN or details in tax return. Bogus Tax, Scammers demand payment for non-existent "federal student tax." CEO Scam, Scammers impersonate executives to get sensitive data from accounting, HR departments. The IRS will never: Call to demand immediate payment. Threaten to arrest you. Ask for credit/debit cards over the phone. Demand you pay taxes without giving you the opportunity to appeal the amount they say you owe. How to protect yourself. 1. File early. The IRS flags a second return as suspicious, so file early, before the bad guys. 2. Go electronic. Opt for direct deposit of tax refunds to avoid lost or stolen refund checks. 3. Choose tax preparers carefully. Avoid unscrupulous companies that steal personal data. 4. Keep sensitive tax data secure on a password-protected or encrypted external. 5. Check with your providers. You already may receive CyberScout Identity Management Services through your insurers, financial institutions an employer. 6. Report scams to email@example.com. 1 “Consumer Sentinel Network Data Book,” Federal Trade Commission, 2016. 2 “Identity Theft and Tax Fraud,” U.S. Government Accountability Office, May 2016. 3 Ibid. 4 “IRS Steps Up Security to Prevent Identity Theft on Tax Returns,” Fort Worth Star-Telegram, Jan. 6, 2017, http://www.star-telegram.com/news/business/biz-columns-blogs/teresa-mcusic/article124975089.html. 5 “Consumers Warned of New Surge in Email Schemes,” IRS, Feb. 2016, https://www.irs.gov/uac/newsroom/consumers-warned-of-new-surge-in-irs-email-schemes-during-2016-tax-season-tax-industry-also-targeted. 6 “IRS Warns of Back-to-School Scams,” IRS, Aug. 2016, https://www.irs.gov/uac/irs-warns-of-back-to-school-scams. CyberScout, We'll Take it From here.
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