It’s Tax (Scammer) Season!
Every year in the United States after celebrating the Winter holidays, the very uniquely American period of tax preparation begins! From January 1st until April 15th we put together data of our previous year’s earnings and report them to the government. If we have overpaid, then an amount is refunded to us.
In recent years this has become a very lucrative period for criminals most especially those that steal our identity and try to claim our refund for themselves. These tax scammers have created ways to try and get your personal information and repeat many of these methods every year because they work.
This year we are starting to see a new twist by tax scammers, and it’s targeted at our employers and tax preparers.
Nina Olson, IRS National Taxpayer Advocate was interviewed by Yahoo Finance and has provided some answers.
Individuals and Tax Scammers
For awhile tax scammers have been working to steal our identity by obtaining our personal information. There are several methods the criminals use, but primarily it involves getting ahold of your social security number and financial data. With the largest hack of this type of information occurring in 2017 with the Experian data breach the financial information of 1 out of ever 2 Americans may be in the hands of the bad guys. This has created an enormous concern for this type of theft.
Once a criminal is in possession of your private information they will usually attempt to file a tax return with your name but with different deposit information. Your refund is then directly deposited or sent to the address provided to the IRS which isn’t you. Once the tax scammer is in possession of your refund it disappears and you never see it. You may not even be aware of the situation until you realize the refund didn’t arrive which could be weeks away.
Some of the attempts at theft are not so subtle. Another method criminals use to get your personal information is via direct phone calls. Someone will contact you claiming to be an agent of the IRS and demand a payment fee under the duress of a fine or even criminal charges.
Olson has stated that the IRS does not ever use these tactics. In the event of criminal charges, there are many steps taken prior to using this method, and you would be aware you have a problem. The IRS does not demand payment by phone – ever.
Tax Scammers are branching out to employers.
According to the IRS and Olson a new scam involves tricking your employer to reveal your personal information. This will involve a phone call by someone representing themselves as an agent of the IRS and telling the employer that they received an electronic file containing an employee’s W2 or other personal information. They will then say that the file was corrupted and ask that it be resent. If the payroll employee sends the information to the requested destination, then the tax scammer can produce perfectly filed returns and deposit the refund into their own bank accounts.
The only way you will most likely find out if you have been a victim of this type of fraud is if multiple returns are filed with your social security number. Again, this can take some time and by time it is discovered, your refund is gone.
Tax Scammers and Tax Preparers
The tax preparer is becoming another target because they also have your personal information. Criminals create official looking phishing emails that hide malicious links and send them to tax professionals across the country.
There are several different twists to this new filing scam. In one scenario the tax scammer uses the taxpayers’ real bank accounts for the deposit and then calls the taxpayer. Posing as an official debt collection agent, the criminal says the deposit was made in error and needs the money forwarded to a new account.
What to do if you are a victim of a Tax Scammer
If you are one of the millions of Americans that become a victim of tax fraud, it’s important to remember you are not alone. These criminals are very good at what they do, and it happens to the best of us. The IRS has a Taxpayer Advocate Service (TAS) that can help. This is also who you will work with to resolve any identity theft issues involving the IRS.
The following list will get you started in resolving these problems:
- File a complaint with the Federal Trade Commission online at www.identitytheft.gov
- Alert the major credit bureaus. You might also consider “freezing” your credit for awhile.
- Check your credit report for accounts opened without your authorization.
- Check your legitimate bank and credit card accounts for unauthorized transactions.
- Complete form 14039 with the IRS – Identity Theft Affidavit
- Send in a paper tax return
- Set up spending alerts on your bank and credit card accounts.
The TAS (Taxpayer Advocate Service) can be found online at taxpayeradvocate.irs.gov
William (Bill) Sikkens has been a technology expert for KXL on the Morning Show with Steve and Rebecca since 2014. With an expertise in I.T., cyber security and software design he has had more than 20 years’ experience with advanced technology. Sikkens conceptualizes and designs custom applications for many professional industries from health care to banking and has the ability to explain the details in a way all can understand. Article edited by Gretchen Winkler.
Got a technology question or comment for Bill? Follow him on Twitter @sikkensw