To paraphrase the old adage, there are only three absolutes in life: death, taxes, and the rise of scams during tax season.
A major tax scam since 2013 involves phone calls by fictional IRS agents that demand immediate payment for alleged tax debts, threatening lawsuits or even jail time to those who refused to comply. The more sophisticated version of this includes spoofing a legitimate IRS phone number to fool caller-ID systems. The callers also have Social Security numbers and enough personal information to convince the taxpayer that the call is legitimate.
From October 2013 to September 2018, the Treasury Inspector General's office identified 14,700 confirmed victims, who were swindled out of more than $72 million through this particular scam.
Other scammers use a carrot instead of a stick. Another significant scam claimed that consumers had been awarded a government grant for having been good taxpayers who regularly paid their taxes on time and in full. The scammer asked for their account information so that the funds could be direct-deposited. The use of the word "grant" apparently fooled more people into believing the scam.
According to the Government Accountability Office (GAO), the IRS managed to block approximately $10.5 billion in fraudulent tax claims in 2016, but estimates that other attempts succeeded to the tune of $1.7 billion. You can decrease your chances of being a success story for a scammer by taking a few proactive steps.
- File Your Tax Return Early – If anyone has enough of your information to file a fraudulent tax return in your name, they will do it as soon as possible to claim your refund before you even realize you have been scammed. Beat them to the punch by filing your tax return as soon as you have the necessary documentation. There is very little downside to filing your taxes early. If you are due a refund, it is obviously in your best interests to receive it earlier, and if you owe you can still file early and arrange for payment to be made closer to April 15th.
Take pre-emptive action during tax season and you are less likely to fall victim to one of these scams. If you are unsure, contact the IRS yourself. The peace of mind will be worth any potential time on hold.
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- Protect Personal Information – Take all reasonable precautions to guard your personal information through the use of strong passwords that are changed frequently and keep your anti-virus software updated. Limit Wi-Fi applications that involve banking and other sensitive activities, and when you do use them make sure the Wi-Fi is secure. Says cybersecurity expert Steve Weisman of Scamicide, "People using a public Wi-Fi for any kind of sensitive purpose – you're playing with dynamite there!" Secure your own router with a password if you have not done so already.
- Ignore E-mail/Phone Calls – The IRS will contact you by regular mail regarding the vast majority of tax issues, and they will never ask you for personal information such as account numbers, PINs, Social Security numbers, or other identifiers over the phone or via e-mail. If you have some reason to think the IRS may need to contact you, make the initial contact yourself.
- Check for Inaccurate Information – It is wise to check your credit report, credit card receipts, and other sensitive documents for any inaccurate information, false credit charges, or fraudulent attempts to open up an account. Even unsuccessful attempts to establish a fake account in your name suggests that at least some of your personal information is out there for the taking.
This article was provided by our partners at moneytips.com.