During tax season, scammers are busy trying to intercept individuals’ tax refunds. Because individuals are often stressed during this time, rushing to file their taxes, they can be even more vulnerable to scams than usual. It’s important to stay vigilant and take proactive steps to protect your personal and financial data.
Tax-related scams are so common, in fact, that each year, the Internal Revenue Service (IRS) publishes the “Dirty Dozen,” which is a list of common scams that taxpayers may encounter during tax-filing season as people prepare their returns or hire someone to help with their taxes.
Here are four tips for remaining vigilant so you can avoid becoming a victim of cybercriminals’ schemes during tax season.
1. Be cautious of phishing emails, smishing messages and fake tax communications
There is an ever-increasing number of aggressive schemes that may arrive via email, text, over the phone, through the mail and even on social media. Here are just two of many types of scams to watch out for:
- Phishing scams involve emails that fraudsters send out, claiming to be from the IRS or from a tax-software company. This type of email tries to get victims to drop their guard by claiming to have a phony tax refund or frightening them with false legal or criminal charges for tax fraud.
- Smishing scams involve text or smartphone SMS messages in which scammers tend to use scare tactics with language such as, “Your account has now been put on hold” or “Unusual Activity Report,” with a bogus “Solutions” link they say will restore the recipient’s account — but instead gives the scammers access to account information. Some of these scams also tell individuals they are receiving unexpected tax refunds and try to get them to provide account information.
If you get one of these messages, do not reply or click the link. Report the scam by sending the email or a copy of the text to phishing@irs.gov.
To find out who’s sending you an email, for example, verify the source. Always double-check the sender’s email address or contact information before opening attachments or clicking links. Any emails you receive from the IRS will be from an email address ending in “irs.gov” — for example, donotreply@account.irs.gov.
The email address of a scam email will likely contain a jumble of letters and numbers instead of a recognizable name. And phone or text scams often originate outside the United States, so they are likely to come from a phone number that begins with a country code, and the phone number will have more or fewer numbers than the standard 10-digit area code plus number format we use in the United States.
Some scammers use spoofing and robocalls to make it seem like the (IRS) is calling. If someone calls you pretending to be from the IRS, request a reference number. Then hang up, and use one of the official IRS numbers to call back and confirm if the call was legitimate.
2. Secure your online tax-filing platform
Another way to protect yourself from tax-related scams is to use trusted, reputable tax-preparation services and well-known, secure tax software. When you sign up for, and use, these platforms, enable multifactor authentication (MFA) if it’s an option (and it should be). MFA adds an extra layer of security to your accounts that store or process tax information. This simply means that, for example, instead of logging into the platform with just your password, you will have to take a second step to log in, such as having a code sent to your phone and then entering that code on the login page.
Updating your passwords regularly can also keep you safer. Use strong, unique passwords for tax-related accounts, and avoid using the same password for multiple logins.
To make this process easier, consider using a password manager, a digital service that helps you generate strong passwords and stores them in a secure, encrypted vault. You can typically use these managers as an app or a browser extension on any of your devices. And then, when you visit a site or open an app that requires you to enter a username and password, the password manager autofills the credentials for you.
3. Beware of tax-related scams on social media
Scams aren’t just a problem in emails, texts and on the phone; scammers also target individuals on social media. Again, avoid clicking on suspicious ads or links when you’re on a social media platform. Beware of scams promoting “too good to be true” tax deals or refunds via social media.
Also, never share any type of tax information publicly. Avoid discussing personal financial matters, like tax filings or refunds, on social media platforms.
4. Monitor your financial accounts for fraudulent activity
It is likely to be obvious to you pretty quickly if a scammer has stolen a large amount of money from one of your accounts or charged a major purchase to one of your credit cards. It can be less obvious when scammers attack on a smaller scale.
For this reason, it’s important to review your bank and other financial statements regularly; look for unusual or unauthorized transactions. Also, set up transaction alerts so you will be advised of any suspicious activity indicating that your information has been compromised.
Report fraud immediately to the appropriate financial institutions and tax authorities as soon as possible so compromised accounts can be closed immediately.
________
It takes some time and effort, but it is extremely important to be extra-vigilant during tax season so you can avoid falling victim to cybercriminals. Practice due diligence, and seek help if you suspect your information has been compromised. Take time to review your security measures before tax season.
And finally, reach out to your financial advisor for guidance on securing your personal and financial information. We are here not just to help you manage, save and grow your assets but also to protect them. Please don’t hesitate to reach out if we can help you set up a cybersecurity strategy.
