Tips to Avoid Fraud During Tax Season

Tiffany M. Faust |
Posted on Jan 23, 2019

I can’t think of a better time than Tax Identity Theft Awareness Week – January 28 through February 1 – to help educate local residents about how to reduce the risk that you or someone you know will become a victim of tax-related identity theft. 

The 2019 tax season has been impacted by new regulations created by the Tax Cuts and Jobs Act as well as the government shutdown. The shutdown has already generated confusion regarding when the tax season will begin, whether refunds will be issued, and whether the filing deadline will be extended. All of these concerns are new topics that could be used by cybercriminals to target concerned taxpayers.  

Cybercriminals typically increase their activity during tax season by impersonating the Internal Revenue Service (IRS) or collection agencies working on behalf of the IRS. It is critical that you understand the telltale signs of tax-related telephone scams and email phishing schemes that target your personal information and refunds, as well as how to respond if you suspect a tax-related communication is not legitimate.

Telephone Scams
Telephone scams often claim the taxpayer has an overdue tax bill and demand immediate payment; however, last tax season a new scam emerged. Using taxpayer information stolen from data breaches, criminals filed fraudulent returns before taxpayers had an opportunity to do so. When the refunds were deposited into the taxpayers’ real bank accounts, the criminals would contact the taxpayers by telephone --- posing as collection agencies working on behalf of the IRS --- to reclaim the refunds they claimed were deposited in error.  

Regardless of the variation of this type of scam, the criminals manipulated Caller ID to display the name of the IRS and often knew the taxpayer’s partial or full Social Security Number (SSN), which made these calls more convincing. The imposter asked for payment via a debit, credit or prepaid card, gift card, wire transfer, or check to the business claiming to be an IRS collection agency. Additionally, if the taxpayer hesitated or refused to cooperate, the scammers became aggressive and threatened the taxpayer with criminal fraud charges, an arrest warrant, blacklisting of their SSN, or deportation. 

It is important to understand that the IRS, as well as their authorized private collection agencies, will never: 

  • Call to demand immediate payment using a debit, credit or prepaid card, gift card, direct debit, wire transfer, or check made payable to any entity other than the U.S. Treasury. 
  • Threaten taxpayers with lawsuits, deportation or imprisonment. 
  • Demand taxes be paid without the opportunity to question or appeal the amount owed.
  • Ask for a bank account number, debit or credit card number, or other personal information over the phone.

Email Phishing Schemes
In 2018, the IRS recorded a 60% increase in tax-related email phishing schemes. The email subject lines were most often regarding an “Important Notice” or “IRS Refund”. Some of the emails contained links that directed taxpayers to fake IRS websites requesting personal information, while others contained attachments that downloaded malware capable of tracking keystrokes to collect information.

Again, understand the IRS will never contact taxpayers by email, text, or social media regarding tax issues involving payments or refunds. In addition, no legitimate business, including the IRS, will use email, text, or social media to request your personal or financial information. It is always wise to be skeptical and never open a link or attachment from a suspicious source. Cybercriminals are adept at mimicking the IRS and other legitimate businesses.

Responding To Suspicious Phone Calls and Emails
If you do not owe taxes, or have any reason to think that you do, do not give out any information. Report telephone scams to the Treasury Inspector General for Tax Administration at 800-366-4484. Suspicious tax-related emails may be reported to phishing@irs.gov. 

On the other hand, if you know you owe taxes, or think you may owe, still remain vigilant and do not give out any information. Call the IRS at 800-829-1040 for assistance.

For more information on scams targeting taxpayers, visit the Tax Scams and Consumer Alerts IRS website at https://www.irs.gov/newsroom/tax-scams-consumer-alerts

Lastly, if you become a victim of any form of identity theft, you should contact your financial institution immediately to protect your accounts from potential criminal activity.  

Tiffany M. Faust
Vice President/Information Security Officer for ACNB Bank