These days, protecting your personal information can feel like a full-time job. Why? Because much of it can be gathered from multiple locations online with little to no verification required. Criminals know this and have become adept at harvesting your info from a variety of websites and using it to file a fake tax return! And if they file it with false information requesting a large refund before you do, you’ll be forced to prove you didn’t do it and correct the return. And once they have your personal information, criminals can continue to use your identity well beyond tax season. That’s why it’s important to understand their tricks for committing tax fraud, so you can prevent it happening…and we’ve got a few tips to help!
Don’t go phish
Fraudsters sometimes send phishing messages indicating that a new copy of your tax form(s) is available. The email will look nearly identical to those from state, local, tribal, and territorial government comptroller and/or IT departments. It might also include a link to a phishing website that uses your organization’s logo and could even have the right signature line. If you fill out or attempt to login into the phishing website, the criminals will be able to see your login name and password, which they can then try to use to compromise your other accounts. The more information they gather from you, the easier it is for them to file a fake tax return in your name.
Don’t fall for threats
Tax fraudsters may also impersonate the IRS and other tax officials to threaten you with penalties if you do not make an immediate payment. This contact may occur through websites, emails, or threatening calls and text messages that look official but aren’t. Sometimes, criminals request that you pay the “penalties” via strange methods like gift cards or prepaid credit cards. So, remember:
- The IRS will never initiate contact about payment with you by phone, email, text messages, or social media without sending an official letter in the mail first.
- The IRS will not call to demand immediate payment over the phone using a specific payment method such as a debit/credit card, a prepaid card, a gift card, or a wire transfer.
- The IRS will not threaten to immediately notify local police or other law-enforcement agencies to have you arrested for not paying.
- The IRS will not demand that you pay taxes without giving you the opportunity to question or appeal the amount you owe.
Take action to prevent tax fraud
Here are a few more tips to help you minimize the chances of becoming a victim of a tax scam:
- If you haven’t already, file your taxes as soon as possible…before the scammers do it!
- Be aware of phone calls, emails, and websites that try to get your information, or pressure you to make a payment. If something seems suspicious, contact the organization through a known method, like their publicly posted customer service line.
- Ignore emails and texts asking for personal or tax information. Be cautious as to whom you provide your information, including your Social Security Number and date of birth.
- Don’t click on unknown links or links from unsolicited messages. Type the verified, real organizational website into your web browser.
- Don’t open attachments from unsolicited messages, as they may contain malware.
- Only conduct financial business over trusted websites. Don’t use public, guest, free, or insecure Wi-Fi networks.
- Remember, the “HTTPS” at the beginning of a web address does not mean a site is legitimate or secure.
- Shred all unneeded or old documents containing confidential and financial information.
- Check your credit report regularly for unauthorized activity. Consider putting a security freeze on your credit file with the major credit bureaus if you suspect you have been targeted for identity theft.
- Send suspicious emails related to tax fraud to the IRS’s phishing@irs.gov email account, or call them at 800-908-4490. More information about tax scams is available on the IRS website and in the IRS Dirty Dozen list of tax scams.
If you suspect you have become a victim of tax fraud or identity theft, the Federal Trade Commission (FTC) Identity Theft website can provide a step-by-step recovery plan. It also allows you to report if someone has filed a tax return fraudulently in your name, if your information was exposed in a major data breach, and many other types of fraud. And remember: Being vigilant today can help you avoid headaches tomorrow—and beat fraudsters at their own game.
