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Let's Talk About Tax Scams

February 27, 2019


You know who looks forward to tax season every year? Hackers and scammers. They’re out in full force now, with more sophisticated tactics than ever at their disposal, all in the hopes of stealing your money, personal information, and more. Thousands of victims have lost millions of dollars and sensitive data since tax scams have become increasingly common. According to the IRS, 2018 saw a 60% increase in phishing schemes alone that sought to steal money or tax data for 2017 filings.

This year, scammers will continue to use the internet, regular mail, telephone, email, social media, and text (SMS) message to confuse individuals, businesses, payroll and tax professionals. However, the truth is that the IRS is not going to call you. The IRS is never going to discuss official tax matters with you over the internet. The IRS is never going to demand money from you via specific payment methods—gift cards, prepaid debit cards, wire transfers, cash, bitcoin(!).

The IRS is also never going to threaten to immediately bring in the local police, immigration officers, or other law enforcement to have you arrested. The IRS is never going to revoke your driver’s license, business licenses, or immigration status on the spot. Threats like these are common tactics scam artists use to trick victims. Don’t fall for it!

That, however, is easier said than done. When you’re the target, it can feel scary, and it’s easy to panic. When it’s happening to you, your natural skepticism and situational awareness is skewed; you lose your risk sense of risk awareness. It’s also confusing because, at the same time, you do expect to receive legitimate messages about your taxes. 

To defend against these security risks this tax season as best you can, it’s a good idea to familiarize yourself with the themes of this year’s most common scams:

The “Tax Transcript” Email Scam

This is an email impersonating the IRS, using tax transcripts as bait to entice you to open documents containing malware. The scam is especially problematic for businesses whose employees might open the malware which can then spread throughout the network with disastrous consequences.

Masquerading as the IRS, the scam email carries an attachment labeled “Tax Account Transcript” or something similar. Scores of these malicious emails were forwarded to phishing@irs.gov recently. (And if you get one, you, too, should forward the email to phishing@irs.gov, and then promptly delete the email.)

The “Tax Transcript” scam is just one of countless phishing attacks during tax season; many of them share striking similarities. One indication that an email is fake is when it addresses you as “sir”, “madam”, or “taxpayer”. To stay safe, never open an unexpected attachment from anyone you don’t know.

The “Ghost” Tax Return Preparer

Ghost tax return preparers make money by promising a big refund and charging fees based on a percentage of the refund. They typically invent income to erroneously qualify their clients for tax credits, claim fake deductions to boost their refunds, then direct refunds into their own bank account rather than the taxpayer’s account.

Anyone who is paid to prepare or assist in preparing federal tax returns is lawfully required to hold a valid Preparer Tax Identification Number (PTIN). These paid preparers must sign the tax return and include their PTIN. But ‘ghost’ preparers do not sign the return. Instead, they print the return and tell the taxpayer to sign and mail it to the IRS, or, if e-filed, they prepare but refuse to digitally sign it as the paid preparer.

When audited, the tax payer is punished for the errors while the scammer, along with your money, is long gone.

Tax Refund Theft

Wouldn’t it be nice to get notice of a secret tax refund waiting for you?

Indeed, but it’s too good to be true.

During the last few years, scammers have been stealing people’s Social Security numbers and then filing false returns as though they were those people. The crooks typically claim a low income with high deductions and file electronically, to receive the biggest, fastest refund possible. Then, when you go to legitimately file your return, it’s rejected by the IRS because it appears as though you’ve already filed. This can take a long time to sort out if you’re on the receiving end of this scam. Remember, the IRS will never ask for your social security number over the phone or in an email.

Preparing your taxes is already taxing. Don’t make it harder on yourself by falling for a scam this year. Read more about security risks and intelligence, and the ways Celerium helps protect you from harm, here.

Celerium's solutions revolutionize how government and businesses collect, manage, share, and disseminate information to reduce cyber threats, mitigate risks, manage incidents, and securely communicate and collaborate with one another. Specializing in risk management and cybersecurity, Celerium is here to help you proactively identify and defend against security risks with the best intelligence. Contact Celerium any time at 877-624-4999 for more information or to see how our solutions can help.