How to Prevent Top-3 Tax Scams of 2017

tax scams
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Don’t get caught in a scam! 

Tax scams come in all shapes and sizes. From phone calls to phishing emails, and even by your own tax preparer, criminals are continuing to find new ways to scam you out of your money and personal information. Tax-related scams can be particularly threatening because the information stolen is often used to commit more serious crimes such as tax identity theft

Follow us as we explore the top-3 tax scams to watch out for this year. 

 

Scam #1: IRS Imposter Scam

The Internal Revenue Service (IRS) Imposter scam is exactly what it sounds like. These types of tax scams have a high success rate because they operate on a victim’s fear. Someone claiming to be from the IRS calls victims to demand payment for owed balances or fees. Scam callers’ threats to arrest or fine victims scare them into paying the fake balance over the phone.

Criminals have improved their scam methods by modifying scripts to target specific types of victims like college students and senior citizens. Forbes reported that the Justice Department found that victims paid $56 million to IRS imposters in 2016. In general, imposter scams of all kinds have affected up to 15,000 individuals, resulting in over $300 million in losses.


PREVENTION TIP: If you receive threatening phone calls about balances or fines related to your taxes, hang up immediately. The IRS will never demand that you pay any amount immediately over the phone.


 

Scam #2: Phishing and Business Email Compromise (W-2 Phishing)

Phishing attacks are a common way that criminals attempt to steal personal information. Sometimes emails contain links that redirect to illegitimate sites that can lead victims to unknowingly give their information directly to scammers. Another way criminals deploy phishing attacks is through keylogging malware disguised as email attachments. Downloading the attachment installs the malware, giving scammers access to the sensitive information stored on affected devices. Tax Scam Infographic FINAL 3

RELATED: (QUIZ) Phishing or Legitimate Email?

Business email compromise (BEC) refers to a type of phishing attack targeted at businesses to obtain personal information or business funds. One type of BEC scam targets a business’ Human Resources department for employee W-2 forms.

The emails requesting W-2 forms are different from other types of phishing attacks because they appear to come from known senders, specifically a company’s executive team or financial departments. As a result, BEC is extremely difficult to detect and is usually discovered only after the information has
been compromised.

Targeting W-2 forms – documents that contain highly sensitive information (Social Security numbers, birth dates, Tax Identification numbers, etc.) – makes this type of scam especially dangerous. The increased incidences of BEC in retailers, temp agencies, restaurants and public school systems illustrate the 400 percent surge in phishing and malware attacks this year.


PREVENTION TIP: Whether you’re at work or at home, never click on links or download attachments from unknown senders without verifying their legitimacy. Be extremely careful at work when handling sensitive data or opening attachments that could potentially threaten your business’ security.


 

Scam #3: Tax Preparer Scam

Tax preparers can be extremely beneficial to the taxpayer – a tool that 60 percent of taxpayers use to file their returns. However, not all tax preparers have their clients’ best intentions in mind. Some abusive tax preparers intend to misuse returns and personal information for monetary gain.

In 2016, there were 252 investigated incidents of abusive tax preparers. Tax preparer scams can range from unnecessary service fees and overcharges to filing your tax return without your permission. Some preparers encouraging clients to claim credits or deductions they are not entitled to because it raises their service rates. Other scams simply convince you to sign a blank or partially blank return so that preparers can alter your return without your knowledge.  

RELATED: The Taxpayer Bill of Rights — IRS


PREVENTION TIP: Avoid tax preparers whose rates are determined by your refund amount and/or ask for your sensitive tax information when discussing services and rates. Be sure to address any questions you have about your return, credits, deductions and refunds with your tax preparer.



What should you do?

To avoid falling victim to tax scams:

  • Hang up suspicious phone calls immediately. Do not interact with scammers. This can lead to more serious harassment tactics like swatting and doxxing.
  • In general, never open attachments or click on links in emails from senders you do not recognize. At work, verify any emails (ideally in-person) that request transferring sensitive company data like W-2 forms.
  • Do your research before hiring a tax preparer. Dishonestly claiming credits or deductions (even if it was done without your knowledge) can lead to hefty fines and potentially jail time. Click here for more information about choosing a trusted tax preparer.
  • Report any tax-related scams to the IRS or TIGTA.

To report tax scams:

The views and opinions expressed in this article are those of EZShield Inc. alone and do not necessarily reflect the opinions of any other person or entity, including specifically any person or entity affiliated with the distribution or display of this content.

John Burcham, Chief Privacy Officer at EZShield Fraud Protection
John Burcham is Corporate Counsel for EZShield. He is a Certified Compliance and Ethics Professional...
Read more about John Burcham.

1 Comments

  1. WOW! Great information, a must for any and everyone. I’ve been a victim, well almost, thankfully I knew the IRS would not have an attorney call me and tell me about a lawsuit being filed against me. With an eastern Indian accent this guy was very friendly, when I politely asked to speak with his supervisor, he hesitated then connected me to another Indian. I asked him when the IRS opened call centers in India, and which part of India he was in. This guy was good, started explaining when, where, and his role, even gave me an ID number. I’ve worked in India, and other countries with them for years in the oilfield so I knew if I brought up why he was involved in this scam, what would his family think if they knew, he would become angry, sure enough after a few minutes of scolding from me he hung up.

    Folks, if you get a call from a number you do not know, don’t answer it, if it is a foreigner, hang up. If the call is legit, they will leave a message.

    Thanks John, and EZShield.

    Reply

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