Tax season provides criminals with ample opportunities to commit fraud and cash-in at their victim’s expense. Tax identity theft is the most common tax scam – when a thief files a false tax return in your name, they will generate and steal a large refund sent by the IRS.

Despite tax identity theft decreasing slightly in 2017, this tax season comes as a greater concern due to the massive Equifax Breach where millions of social security numbers were stolen. This makes consumers even more vulnerable. The best thing you can do is make sure to file your taxes as early as possible.

Also, this year the IRS is notifying consumers of a new approach to tax return theft. Rather than having fake returns deposited into the criminal’s bank account they are having them deposited into the victim’s account. Then the criminal will contact the victim claiming to be a creditor, collection agency, or to work for the IRS, they will demand payment saying that the return was deposited on error and the funds are due to pay some outstanding debt.  If this happens, call the IRS to confirm before handing over any funds or details to the caller.

Some other common tax scams:

Phone scams:

The IRS will never call you and demand payment. Even, if the caller offers an IRS identification number, always check the information and never give out information. Criminals do research on their victims and will have a lot of details, this does not mean they are legit and caution should always be taken.

If the IRS is looking to collect on a debt, they will send you a letter. If you receive this type of letter, verify it as accurate by calling a real IRS phone number and not the one listed on the letter.  

CPA scams:

Tax professionals should be aware of scams that face them. Thieves may try and communicate with a CPA in an attempt to gather sensitive information on their clients. Be aware of bogus calls/emails that ask for information on your business and details of your clients.

Payroll scams:       

Criminals may try to contact employers to gather W-2 information/copies on employees. Employers use protocols to protect this information and never release it over the phone or email.

Phishing:

Criminals will send emails using fraudulent logos, titles, and company information to try and gather (or fish for) information. These emails are used to trick people into confirming information or providing additional information.

The best practices for protecting yourself from tax id theft have not changed from last year. Just keep in mind that even though this type of scam has been on the decline, does not stop criminals from thinking up new tricks.

• File your taxes early. Criminals will usually file quickly so they can get away with the crime without a hitch. Filing your taxes as soon as your documents are in order can deter fraud.
• As an extra measure of protection, you can request a pin number from the IRS, the purpose is to verify your identity when filing.
• Send your return through a secure carrier – take the envelope directly to the post office and purchase tracking.
• If someone calls or emails you claiming to be from the IRS, a creditor, or bank, never give out personal information or payment.
• Keep all personal and business information secure.
• Never trust unfamiliar emails or calls. Even if they provide a lot of details and sound “professional”, do not release or confirm information.
• If you have been a victim or have reason to suspect fraud, consider a monitoring product. Your credit report is usually one of the first places you see the signs of fraud.