How IRS Tax Scammers Steal Your Identity

From 3/16/2018 How IRS Tax Scammers Steal Your Identity

Tax scammers are working overtime this time of year. As you think about preparing your taxes - or work with your tax planner - they are pulling out all the stops to steal your financial information.

Thanks to increased vigilance on the part of taxpayers and the IRS, the number of tax scams fell last year. But they are still prevalent. These grifters are not going away.

According to the IRS, "the number of taxpayers reporting themselves as identity theft victims declined by 40 percent in 2017 from 2016. In 2017, the IRS received242,000 reports from taxpayers compared to 401,000 in 2016."

"This was the second year in a row this number fell, dropping from 677,000 victim reports in 2015. Overall, the number of identity theft victims has fallen nearly 65percent between 2015 and 2017.

"This year, tax scammers are stepping up their game. Their modus operandi is simple: Steal Social Security numbers and file false tax returns. They create fake returns that produce fraudulent refunds, then pocket the ill-gotten gains.

How do they get this information? Sometimes they steal W-2 forms. Most of the time, they use "phishing" techniques by sending out emails pretending to be a bank.

As soon as you "verify" account information or send a Social Security number, they got you.

You can easily avoid getting fleeced. This is what the IRS recommends to avoid problems:

  • Always use security software with firewall and anti-virus protections. Make sure the security software is always turned on and can automatically update.

  • Encrypt sensitive files such as tax records stored on the computer. Use strong passwords.

  • Learn to recognize and avoid phishing emails, threatening phone calls and texts from thieves posing as legitimate organizations such as banks, credit card companies and government organizations, including the IRS.

  • Do not click on links or download attachments from unknown or suspicious emails.

  • Protect personal data. Don’t routinely carry a Social Security card, and make sure tax records are secure.

  • Treat personal information like cash; don’t leave it lying around.

Oh, and keep in mind that the IRS doesn't call and leave messages, unless, of course, you call them first. They will not "arrest you."