5 Tricky Tax Season Scams and How to Avoid Them

You know the only saying “Nothing is certain but death and taxes”?

Seems pretty clear that the saying could be amended to “Nothing is certain but death and tax season scams” and it would still hold true.

Nowadays, the frustration of trying to figure out who your dependants are and what your deductible will be are only a part of tax season woes. Tax related scams have spiked, with more than a 400 percent rise in incidents compared to last year, according to the IRS.

To help citizens understand and steer clear of threats (and stay on the right side of the law), The IRS has come out with what they call The Dirty Dozen, a list of the most common tax-related scams going around this year. Some items on the list serve as warnings against scams that a tricky tax payer him or herself might just try to pull off. But the rest of the list serves to educate good law abiding citizens of the dangers that exist.

Here, we’ll take a look at those scams:

Phone Scams: One prevalent scam making its rounds involves calls in which scammers pose as IRS representatives. The callers may threaten arrest, license revocation and deportation if the recipient fails to provide the information the “rep” requests. But the truth is that the IRS will never request information over the phone. According to IRS Commissioner John Koskinen, “If you’re surprised to get a call from the IRS, it almost certainly isn’t the real IRS. We generally initially contact taxpayers by mail.” IRS phone scams have cost victims over $54 million in the last four years.

Phishing: This is similar to the phone scams idea but in this variation, the target might get an email or come across a link to a web site that appears to be from the IRS.

When it comes to emails, the sender may pose as a legit bank representative, an IRS rep or a tax preparer and scarily enough, they might even use their assumed identities’ real, yet very hacked email account to send out phishing emails, adding to the brute force of this method.

Fraudulent IRS websites also fall under the phishing category; fake links in emails and on websites can fill devices with malware that capture sensitive information, like logins and passwords. Says the IRS on their website “The IRS generally does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.” And take care to make sure you’re on the real IRS website, which is http://www.irs.gov/.

Identity Theft: Back in the day (before 2015, that is), tax-related ID theft was typically thought of as a result of malware that infiltrated through weak security practices. To be sure, this is still often the case but when the IRS’s Get Transcript database was hacked in 2015, the attack exposed the ID’s of millions of taxpayers and a whole new crop of victims was created. These new victims, through no wrongdoing of their own, will have to monitor all their accounts, from Social Security, to bank to email and everything in between vigilantly, basically for the rest of their lives.

For everyone else, it’s just a matter of using smart digital security practices. Says Commissioner Koskinen, “Everyone should guard their personal information by protecting their computers and using extreme caution when viewing emails or getting surprise phone calls… We all know someone who is challenged by technology, and some easy, common-sense steps could help protect these people from identity theft.” We have covered hundreds of practical digital security tips, so if you’re an RCS security blog regular, you should have all the tools you need to stay secured.

Fake Charities: We have all heard from charities that when we give a donation, we can use the receipt to get tax deductions. This is  great – it encourages giving and helps the donor at the same time, an awesomely symbiotic relationship. But scammers love taking advantage of the kindness of good people and thus they set up their own charities, often times invoking recent tragedies or hot button social issues to encourage donations. The IRS urges people to conduct due research before giving donations to organizations and provide a resource to help citizens determine if the charity of their choice is legit or not.

Tax Preparer Fraud: This is a frightening scenario in which a scammer masquerades as a tax preparer. These baddies attract customers by promising huge returns and low preparation rates and in this position, the scammer can get his or her hands on hugely damaging information. Up to 60 percent of people in the US use a tax preparer (no word on how many of them are not legit) and so the IRS has prepared a very detailed list of how to go about choosing a legit one.

How to avoid Tax-Season scams:

Aside from reading the scam-specific information provided by the IRS (which you most definitely should do!), there are some easy things you can do to up your security, online and off:

  • Use strong passwords. The longer, less predictable, more random, the better. And don’t reuse passwords from site to site.
  • Never ever give out sensitive information over the phone or via email. The IRS sends letters using the regular ol’ US postal service.
  • Never click on email attachments or on links on websites unless you’re 100 percent certain they are the real deal. To help determine if a website or email is legit, look for misspellings and check out the website’s address to make sure it’s correct.
  • If anyone promises you something that’s just too good to be true, remember that it’s simply not true.
  • Set up a reputable antimalware suite like RCS to ensure that information-stealing malware cannot make its way onto your devices.
  • Stop carrying your Social Security card around in your wallet – pronto.

So while it’s true that taxes are one of those unavoidable things (even US citizens living abroad have to pay up on their foreign earnings or face arrest), getting hit with a tax-related scam doesn’t have to be a “given”. Unfortunately, the business of scamming doesn’t seem to be showing any signs of slowing down so education is the key to spotting a scam. With the right knowledge and security habits, chances are that your sensitive data will remain secure.

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