Prevent Identity Theft and Tax Refund Fraud
Saturday, March 31, 2018 7:11:59 PM
Every year thousands of people fall prey to tax fraud and monetary losses add up to millions of dollars. This year the Internal Revenue Service (IRS) has reported seeing email schemes targeting tax professionals, payroll and human resources personnel as well as taxpayers like you and me.
Tax fraud may come in the form of emails from your bank, credit card company, tax preparer or even a government agency. They may appear to be legitimate but are scams by criminals who are seeking money, passwords, social security numbers and other information that can lead to identity theft.
A growing scheme is to leverage “erroneous refunds.” In these cases, scammers target tax preparers and use information gleaned from recent data breaches to file phony tax refunds through online filing services. When the refund is deposited into their victim’s bank account, the scammers contact the victim claiming to be a debt collector to obtain the money on behalf of the IRS.
If you receive a fraudulent deposit from the IRS, contact your financial institution immediately and consider closing your account. If your account details were disclosed, scammers may have the means to withdraw the money. If you used a tax preparer, notify them as well.
The scam can also involve a refund by paper check. If you receive one, write “void” on the endorsement section on the back of the check and return it immediately to a listed IRS location.
Remember, the IRS generally initiates contact through mail delivered by the United States Postal Service. Under special circumstances in which IRS representatives may call or visit a home or business, the representative will carry two forms of official credentials, the pocket commission and a Common Identification Standard for Federal Employees and Contractors (HSPD-12) card. Even then, call the IRS to verify the representative’s identity and case before disclosing any information to him or her.
The IRS will not call to demand immediate payment or threaten to contact the police, immigration officers or the FBI. As a taxpayer, you have the opportunity to ask questions or even appeal the amount.
As always, be on guard against fake emails, web sites, phone calls and text messages related to your tax filing. You can forward suspicious emails to firstname.lastname@example.org. Utilize safe Internet practices and use security tools to prevent malware. In all, no security measure or procedure is 100% foolproof. Thieves and scammers will always find a new way to scam taxpayers. Be vigilant and file your taxes as early as you can to avoid becoming a victim.
Marc Masuno is a managed security and professional services architect on Hawaiian Telcom’s Advanced Architecture Team. Reach him at email@example.com.