I did some research and Benjamin Franklin really did write the only certain things in life are death and taxes. For Americans, since the passage of the 16th Amendment to the Constitution was ratified and gave our government the right to collect taxes, that inevitability comes around all too frequently. Millions of us dread April, not only for the spring pollen but for the anxiety of tax season. But today we have a new reason to dread tax season, and we can refer to it as tax scam season.
Knowing the most popular tax scams will help you from becoming a victim of one.
The Most Popular Tax Scams
Tax season and tax-related online scams remain a most popular type of phishing scams. Checking with IRS records and police departments, these are descriptions of four types of tax scams individuals and businesses can avoid as they’re preparing to file their taxes in 2016.
“Your account or tax return is locked or restricted”.
Do you know what “phishing” is? It is when an unknown individual tries to obtain financial or other confidential information from you over the Internet, typically by sending an email that looks as if it is from a legitimate organization, usually a financial institution, but contains a link to a fake website that replicates the real one.
The first type of scam arrives in the form of an email claiming to be from the Internal Revenue Service (IRS). The email says the recipient’s tax return is “restricted.” Investigators have also discovered phishing emails impersonating TurboTax, a popular tax preparation software, claiming that the recipient’s TurboTax account is locked. In both cases, the goal is to convince you to click on a link, and submit their personal information to unlock their tax return or TurboTax account.
The email can look legitimate, because the scammers often will copy the images off the legitimate site and paste them into their phony message. Even the website you get transferred to by the bogus link will look valid. It’s much safer, if you think the contact is legitimate, to skip using the link sent to you and go to it independently in your browser.
2. “Update your tax filing information”
The next type of fraudulent email says you need to update your “tax filing information” or your tax return. In most cases the message won’t tell you what the problem is because there isn’t one. This is an absolute “red flag.” Again, if you have any doubts or worries, contact the IRS directly.
Most phishing emails contain a link to a fake site, where personally identifiable information can be captured and submitted to the cyber criminals. In some cases, the link is replaced by an HTML attachment.
There are many phone scams purporting to be from the IRS out there as well, but the government tax folks tell us they will never phone you; all their communication with taxpayers is done in old-fashioned printed letters with a phone number or contact name for you to reach out to.
Also the IRS prefers any payments you may to them be in the form of a check, not a debit or credit card.
3. “Tax payment was deducted from your account”
Discovering you have a tax liability is scary enough, so it comes as no surprise that cyber criminals are also sending out emails claiming that a tax payment was deducted from the recipient’s bank account. In some variations they tell you they need to verify or correct some bank account information, and conveniently offer you a link for this. Warning: don’t do it!
Attached to the email is a “receipt” that acts as a reference for the deduction, but it contains a malicious file that infects the computer. Clicking on that attachment releases the virus that will destroy your files and your computer. If it shows up in a preview pane, you are okay, just don’t open the email or try to open the attachment. Delete them both immediately to the Recycle Bin, then empty the trash and restart your computer.
4. “You are eligible to receive a refund”
On the other side of getting word you owe money to the IRS, scammers will tell you the IRS owes you money; “you are eligible for a tax refund” is an even more likely scenario. In my decades as a U.S. Taxpayer, I’ve never gotten such an email or a letter. The refund just shows up.
Researchers at Inc.com report they have found these types of emails, and they’ve found an interesting variation on this scam in 2016.
Now, this particular scam asks the recipient to provide proof of identity. The requested proof of identity documents include a copy of a valid (signed) full passport as well as a scanned copy of a utility bill, bank statement, or credit card statement. They may also ask for your date of birth or your mother’s maiden name. Recipients are asked to send these documents to an @consultant.com email address. It sounds correct because these are the normal documents requested by government and business to confirm identity. Do as they tell you, and your identity has just been compromised!
5 Tips To Stay Safe During Tax Season
When preparing to file your taxes this year and every year hereafter, here are some tips to keep in mind when receiving unsolicited communications.
Be sure you share this information with your significant other; they might, when checking email see one of these deceitful messages and respond to it, feeling quite proud they have helped you out.
Although it seems obvious, some citizens are not aware the IRS does not initiate taxpayer communications through email—ever. They send letters via the mail. That way they have a paper trail to rely on. And there is no doubt that the letter will get your attention. Having been the recipient once, seeing that return address and the bulk of the envelope shakes you to the very core.
One of the biggest indications that an email is fake is when it addresses you as “sir”, “madam”, or “taxpayer.” As insensitive and uncaring as they appear to be, the IRS does have the courtesy to address you by your name.
Do not click on any links or open any attachments claiming to be from the IRS, “Income Tax Department”, or your tax preparation company. And be just as careful about anything from a state or local government agency. Though the cyber crime has not yet descended to state levels, it will eventually drop that low.
In the meantime…
- Report any emails claiming to be from the IRS by forwarding the emails to email@example.com
- Never respond to unsolicited emails requesting scanned copies of personal documents
- Try to stay safe online this tax season, and remember that the deadline to file is on Monday, April 18
Have you ever been the victim of a tax scam? How do you respond to unsolicited email requests for personal information?