It’s that time again. April 18 is fast approaching and tax returns will soon be due. (The filing deadline this year is April 18 instead of April 15, due to Emancipation Day.)
Whether you do your own taxes or have someone else prepare them, your taxes are probably on your mind, or will be soon. But you’re not the only one thinking about this. Someone else is, too, but they are thinking about it from a different perspective. This is a time of opportunity! An opportunity to take advantage of you and use it to get your sensitive information and maybe your money as well.
By this time last year, there had been a fourfold increase in phishing attempts to gain access to sensitive information. I don’t have statistics for this year, but you can be sure that the threat is not going away. And criminals have expanded their repertoire of techniques and are constantly innovating, finding new ways to con their victims.That means, they are thinking up new ways that you haven’t yet heard about, to convince you to give them information about you or to con you into sending them money.
They are using phone calls, e-mail, and text messages, as well as finding other ways to use the Internet to carry out their agenda. Your best defense is becoming aware of the threat and also of the techniques they use.
But, just like we see with other threats, they innovate. So it isn’t enough just to learn about the latest techniques being used. There will be new methods put to use this year, and we won’t hear about those until they become recognized and cause enough harm for someone to tell us about them or until we fall prey to them ourselves. So, while learning the techniques is useful so we can recognize them when we see them, we also need to be aware there is a threat and to be cautious.
Let’s start out with an announcement from the IRS.
REMEMBER: The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. In addition, IRS does not threaten taxpayers with lawsuits, imprisonment or other enforcement action. Being able to recognize these telltale signs of a phishing or tax scam could save you from becoming a victim.
Additionally, the IRS says
the IRS will never:
Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
Ask for credit or debit card numbers over the phone.
So, if anyone attempts to contact you and does any of the things that the IRS said they would not do, you have good reason to believe they are attempting to take advantage of you and that they do NOT represent the IRS.
A couple weeks ago, I was adding air to my car tires because they were low. Someone walked by and greeted me. I responded and they struck up a conversation. They told me how they worked for Toyota and had a “treatment” they could apply to my car to bring out the shine. Because I was his “neighbor” he would give me a phenomenal deal. He was a really smooth talker and sounded convincing.
Interestingly, this same guy had approached me a couple years earlier and wanted to use a heat gun to dry out my wheels, when he found me investigating a sound they were making. I remember from that time how skilled he was at his presentation. He really played the “neighbor” card. “You’re my neighbor…. we’ve got to stick together…. and so forth.” He had an air gun from his employer but he had to return it in a couple of days, so the work had to be done within the next day. And he was going to offer me an unbelievable price, saving me hundreds of dollars.
It reminded me of someone I ran into on a Manhattan street who “knew my father” and engaged me in a conversation that ended up with him asking for money for (I don’t recall what). But he was a really smooth talker and sounded really convincing.
My exchange with the “neighbor” above ended up with me firmly stating, “I don’t want you touching my car!” He had come back with a bottle of some liquid and a rag and he was “just going to rub a little bit on a spot on the door to show me how well it would bring out the shine.”
My point is that there are people who have practiced their deceptive approaches and know just how to play on your emotions and use all sorts of psychological tricks. They get you to trust them and then persuade you to do something, perhaps give them information or give them money…. if you fall for their convincing tactics.
If we think of ourselves as “nice guys” or “nice gals” we may hesitate to confront them. But we may have to do that. If it’s a phone call, we may have to just hang up on them. If it’s an e-mail, we need to just “DELETE” it. Don’t let them push you into something. They can get really pushy, even abusive and threatening.
One of the relatively recent scams is for someone to call on the phone claiming to be a representative of the IRS. They state their (fake) name and badge number. They may “spoof” the number they are calling from to make it look like it is coming from the IRS.
In some cases, they may know a fair amount about you. They may even know the last four digits of your social security number, or even your entire social security number.
They claim you owe taxes and need to pay them. They suggest you settle this now, often by using a pre-loaded debit card or a wire transfer, and they typically threaten arrest if you don’t pay up. Or, they may threaten to suspend your driver’s license. If you are an immigrant, they may threaten deportation. If you own a business, they may threaten suspension of your business license. They may become increasingly hostile and threatening if you resist. If their call goes to your voicemail instead, the message may demand you call them to settle an urgent matter.
Ignoring such calls or terminating them can create anxiety. There may be some uncertainty in your mind and you may find yourself asking, “What if….”
REMEMBER: if you owe the IRS money, they will send you a letter by U.S. mail. They won’t call and threaten you.
A variation on this is a phone call to a parent demanding payment of the Federal Student Tax. They may threaten to have the student arrested if payment isn’t made. There is no Federal Student Tax; this is a scam.
Thousands of people have fallen victim to these phone scams; tens of millions of dollars have been lost in recent years.
Some of the other things to watch out for:
* E-mails claiming to be from the IRS
If there is an issue, the IRS will contact you by mail. If someone is sending you an e-mail requesting information or asking for payment related to your taxes, you should consider it to be fraudulent. The only exception is if it comes from your tax preparer, the one you hired (not someone trying to get your business). But you should NOT send sensitive information by e-mail, even to your tax preparer. The only safe way to e-mail sensitive information is if it is encrypted BEFORE sending it, using a strong, trusted encryption solution.
* Tax Preparer Problems
There are people who go into the business of preparing tax returns in order to gain access to your information. Then, they can turn around and use your information to steal your money or your identity. These people may actually know how to prepare and submit tax returns but be using their position to obtain access to your information. Be cautious if you don’t have a trusted tax preparer. Don’t search using a search engine; you may end up with a scammer who knows how to get ranked high in the search results.
Instead, you can use the following resources:
IRS guidance on locating a tax preparer
IRS programs for free tax help
Be wary of anyone who:
Promises extra-high refunds
Promises you a large refund before reviewing your situation
Charges you based on the size of your refund
Asks you to sign a blank return
Contacts you through spam e-mail
Attempts to “verify” tax information by phone or by e-mail
Be aware that flyers and ads that you see in stores, in publications, or on roadside signs may be placed there by scammers. They also may set up their own tax refund storefront or even promote their services through community groups that you trust. Surely, if this community group provides the information, the preparer must be good, right? That’s what the scammers want you to think, so they may approach such groups and convince them to offer a referral “as a community service.” After all, crooks can be ingenious. Although those sources may direct you to a good tax preparer, do you want to take the chance? See the links above for IRS guidance on locating a tax preparer if you don’t have personal knowledge of someone you know is trustworthy.
* Tax Refund Scams
One type of e-mail scam claims to be from the Taxpayer Advocacy Panel (TAP). Although this is a real organization, such e-mails do not come from them. Instead, they are sent by someone pretending to be that group in an attempt to get your personal and financial information while talking about getting you a tax refund.
Scammers may ask for details related to refunds or filing status, or may claim to be confirming personal information or verifying PIN information. They may approach you about ordering transcripts or copies of your tax records.
Their e-mails may have subjects or requests related to updating your filing status, talking about an IP PIN or E-file PIN, ordering a transcript, or confirming information.
Text messages are also being used.
The information they obtain could be used to file fraudulent returns or otherwise steal your information, money, or identity.
This is only a partial list of the ways these criminals are taking advantage of the tax season to carry out their normal agenda: stealing your information and your assets. If I were to attempt to compile a complete list, it would probably fill a book. Even then, variations on these techniques and brand new approaches would soon appear.
If you want to know more, you can go to the IRS site at:
https://www.irs.gov/.
The IRS site has a search box where you can search for scams, phishing, and other relevant keywords or phrases.
You should type the address in rather than clicking on an e-mail link to get there. (Some crafty scammers may send you an e-mail that refers you to IRSgov. That is NOT the IRS site. Note that the legitimate IRS site has a “dot” between IRS and gov. These scammers will try to trick you by eliminating the dot, which takes you to a completely different web site, one under their control. If you don’t notice that the dot is missing, you may become a victim.)
Your best defense is to be aware that your information and money are being targeted and have an idea of the kinds of things that the bad guys are doing. Then, you need to remain alert as you prepare and file your taxes, handle your tax and financial information, read your e-mail, answer phone calls, texts, or voicemails, and go about your daily life.
Awareness is key and a cautious attitude comes in a close second.
Here’s another quote from IRS documents
The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.
Report suspicious online or emailed phishing scams to:phishing@irs.gov. For phishing scams by phone, fax or mail, call 1-800-366-4484. Report IRS impersonation scams to the Treasury Inspector General for Tax Administration’s IRS Impersonation Scams Reporting.