As tax season approaches, many individuals and families find themselves preoccupied with gathering various personal and financial documents. This process ensures that they can prepare and submit their tax return by the deadline. However, it's important to remain vigilant during this time, as cybercriminals are also ramping up their activities, devising new and sophisticated schemes to steal identities and financial resources.

By recognizing the common tactics scammers use during tax season, you can improve your awareness and reduce the likelihood of your personal and financial data being compromised. 

Get an Identity Protection PIN

 Obtaining an Identity Protection PIN (IP PIN) from the Internal Revenue Service (IRS) is an essential step in safeguarding yourself against tax-related identity theft when filing your tax returns, whether electronically or on paper. The IP PIN is a unique six-digit number assigned to eligible taxpayers that serves as an additional layer of security, ensuring that only you can file a tax return using your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).¹

To request your IP PIN, you must first create a secure account on IRS.gov. This involves providing personal information for verification purposes, such as your name, date of birth, and SSN. Once you receive your IP PIN, be sure to keep it in a safe place.

File Your Tax Return Electronically

During tax season, scammers frequently use tactics such as stealing mail from mailboxes to obtain tax returns. This stolen information can be used to commit identity theft, allowing scammers to file fraudulent tax returns or gain access to personal financial accounts. To help protect yourself from these risks, consider filing your tax return electronically.

Electronic filing, also known as e-filing, is designed to reduce the risk of personal information being compromised during the transit of traditional mail. To ensure your information remains secure, submit your e-filing only through a trusted tax-filing portal that uses HTTPS. This means that the data you transmit will be encrypted.

Pay Your Taxes Electronically

 If you find out that you owe money to the IRS after completing your tax return, it might be beneficial to pay your taxes electronically. During tax season, fraudsters often steal mail to get their hands on checks. If they succeed, they can change the payee or the amount on the check, which can lead to serious issues. You can make electronic payments directly through the IRS website using IRS Direct Pay, which is a secure option.²

With IRS Direct Pay, you can pay your taxes directly from your checking or savings account. Additionally, you can pay your taxes with a credit card, though this method incurs a fee. By paying your taxes electronically, you not only protect your personal and financial information but also streamline the payment process, avoiding potential delays that can occur when mailing a check.

Create Strong Passwords and Use Multi-Factor Authorization (MFA)

If you use an online tax preparation service or a cloud-based provider to upload and share files with an accountant, it's crucial to prevent your sensitive personal and financial information from falling into the wrong hands. To enhance your security, create strong, unique passwords that differ from any other passwords you use.

You can also add an extra layer of protection by using multi-factor authorization (MFA). This security feature requires a one-time security code to access your account.

Recognize the Warning Signs of Tax Scams

 Cybercriminals know that many people are unaware of tax-related scams, leaving them vulnerable and unable to recognize or protect themselves against these threats. Below are some prevalent tax scams that you and your family members should be vigilant about, along with tips to help you identify and avoid falling victim to these schemes.

Fraudulent Phone Calls or Texts

Fraudsters often impersonate IRS employees by calling (vishing) or texting (smishing) unsuspecting individuals with misleading instructions regarding tax payments. They may use high-pressure tactics to create a sense of urgency, suggesting that immediate payment is required via wire transfer or credit card. If you receive such a communication, it's essential to verify its authenticity by contacting the IRS directly using official contact information.

Suspicious Emails or Social Media Messages

If you receive a suspicious phishing email or a direct message on any social media platform claiming to be from the IRS, treat it with caution. These messages often attempt to mislead people into providing personal information or clicking on dangerous links. Remember, the IRS has a strict policy against initiating contact with taxpayers via email or social media.

Malicious Websites

As tax season approaches, many individuals look online for guidance on tax deductions, credits, and the latest tax law changes, as well as for online tax preparation services. If you're looking for these resources online, be cautious, as fraudsters may create fake websites that look legitimate. Creators of malicious websites want to trick visitors into creating accounts with their email addresses and passwords and providing personal and financial information. Always check the URL to confirm that it is the official site and not a fraudulent clone.

Suspicious Links

If you encounter a link that promotes tax-preparation services, software, or other tax-related offers that seem too good to be true or appear suspicious, take a moment to think before you click. Tax scammers often post spammy links in bogus emails, on online platforms, and in social media posts. When clicked, these links may lead to malicious sites designed to steal your personal information or install harmful software on your computer or mobile device.

Ghost Preparers

Imagine hiring a tax preparer and paying them an upfront fee, only to find out that you've been scammed. Your calls go unanswered, your emails are ignored, and before you know it, your tax return remains incomplete. This tax-related scam is known as "ghosting." Therefore, if you decide to hire a tax preparer to assist you with your tax return, it is necessary to verify that they have a valid business license, an IRS Preparer Tax Identification Number, and are registered with the Secretary of State.

Shred Outdated Tax Documents

 It is important to keep a physical copy of your tax return for a set period in case the IRS decides to conduct an audit. The IRS can audit returns filed within the previous 3 years and, for special circumstances, up to the past 6 years.³ If you have physical copies of your tax return that exceed these time frames and you no longer need them, don't throw them in the trash.

Make sure to shred these documents using a paper shredder so your personal and financial information doesn't fall into the hands of a fraudster or a dumpster diver.

Make sure you’re prepared for tax season and check out our checklist. 

Source:

¹https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin

²https://www.irs.gov/payments/direct-pay-with-bank-account

³https://www.irs.gov/filing/time-irs-can-assess-tax

Disclaimer:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank does not endorse nor is affiliated with the companies listed in this article.