25Jan

Top 3 Tax Scams in 2021

Tax season is upon us. Again. And so too are the tax scams acted out by bad actors clamoring to steal your money, your identity, or probably both.

While filing extensions for your 2019 returns may have drawn out the process last year, it looks like the IRS isn’t planning to wait it out in 2021. But as April 15th approaches, Uncle Sam isn’t the only one with an eye on your tax return; cyber criminals are once again leveraging every soulless bone in their bodies to get their hands on your personal data and even your tax refund.

 

There are a countless number of tax scams, but cybersecurity experts and the IRS are always keeping their eyes on a few of the most common ubiquitous and nefarious schemes.

 

Below are the Top 3 Threats to You This Tax Season.

 

IDENTITY THEFT

 

Identity theft is an insidious crime that can empty bank accounts, ruin credit, and wreak financial havoc on its victims for years to come, including the filing of fraudulent tax returns. And while identity theft schemes predate the internet, advanced technology has exponentially exacerbated the threat. In 2019 alone, the FTC reported more than 650,000 reports of identity theft. My guess is you can probably double that number.

 

The IRS says they are making strides in detecting false tax returns related to identity theft and aggressively pursuing criminals who file them.

 

But just how are the bad guys getting your social security number and other identifying personal data? Beyond phishing schemes, which we cover a little more extensively below, there are any number of ways thieves are stealing your identity – and their methods are getting more creative, sophisticated, and aggressive.

 

The bad guys might dig through your garbage, lift your wallet or purse, submit a Forward Mail Request to the Post Office, or access electronic records through an orchestrated data breach. To name just a few.

 

What You Can Do: First and foremost, never-ever share your social security number or taxpayer number with anyone. Not by phone, not by text, not on a website, not by email. Just don’t share it. At most, legitimate entities might request the last four digits for verification purposes.

 

Invest in a shredder, keep your purse or wallet on your person and be conscious of odd activity like not receiving your monthly bank statement or getting collection calls regarding unfamiliar accounts.

 

Also, if you are preparing your text return online, be sure you have solid antivirus and firewall protection installed. All tax preparation sites should have proper encryption to ensure data security.

 

PHISHING TAX SCAMS

 

In the fake email scenario, also known as phishing, scammers posing as the IRS send emails to unsuspecting taxpayers to trick them into providing personal and financial information. The bad guys then use that data – like your social security number and banking information – to steal your identity, clear out your checking account or even file false tax returns.

 

The Biggest Takeaway: It is important to understand that government entities, including the IRS, will never reach out to you by email. The bad guys can be sneaky though, so if you still find yourself wondering whether an IRS email is legit, visit www.IRS.gov, scroll to the bottom of the page, and click on Contact Your Local Office.

 

TELEPHONE TAX SCAMS

 

Did you know that scammers can make any name appear on your Caller ID? It is called phone spoofing and the bad guys use it all the time. So while your phone display tells you it’s the IRS on the other end of the line, it is far more likely a scammer hoping to work you over.

 

Scammers like these will often request you to “verify” identifying information, like your social security number. Or they might explain they would like to refund an overpayment and all they need is your checking account or credit card number. If you don’t bite, they will likely threaten you with imminent arrest.

 

How to Stay Safe: Again, the IRS is not likely to contact you by phone and will never threaten you with arrest. Even if you do owe back taxes, the IRS’s collection process is well documented; while there may be late fees and penalties involved, unless you are holing yourself up in a cement bunker to avoid the Tax Man, you really don’t need to worry about handcuffs and prison sentences.

 

DEATH AND TAXES

 

As the old saying goes, nothing is certain but death and taxes. But as a cybersecurity expert I know that bad actors, hackers, and scammers aren’t going anywhere. Next year at this time, I will once again be shouting from the rooftops, warning individuals and industry about the cybercrime and identity thieves that threaten our data, bank accounts and livelihoods.

 

It will only be through enhanced security measures, both from a technology and a self-responsibility standpoint, that we will begin to make a dent in the behemoth threat known as cybercrime.

 

Stig Ravdal is the President & Founder of Ravdal, Inc., a leading cybersecurity company. He is an expert in the fields of cybersecurity strategy and technology solutions, and is available for speaking engagements.

By
25 Jan, 2021