The Lloyd Voice

4 Tips to Protect Yourself from Scams During Tax Season

Maria Sadek
By Maria Sadek | Apr 1, 2022 9:36:56 AM

 

Last year, the nation’s tax collector opened 2,500 criminal investigations and identified $10 billion in tax fraud and financial crimes. Primarily, scammers prey on taxpayers by pretending to be the IRS – and by claiming refunds that rightfully belong to you and/or gaining access to your bank accounts.

It can happen to anyone, that’s why it’s important to stay vigilant and educated on specific red flags that can potentially prevent these dreadful scams. Here are four tips to look out for to keep your bank account safe and stay in good stead with the IRS and your financial institution:

  1. Tax Return Fraud

The reason you hear you should file your tax return as early as possible is because someone else can file a return in your name and steal the refund you’re expecting. You may not realize someone has filed a fraudulent tax return until you eventually go to file yours and discover that “you” have already filed.

If someone has gathered enough information to file a tax return for you, like your Social Security number and contact information, it’s almost certain they have enough personal information about you to access other aspects of your identity or finances.

Another type of fraud entails your tax preparer misreporting your refund total to you by giving you a lesser amount than what you’re owed and keeping the rest of the refund for themselves. The IRS doesn’t keep tabs on how prevalent “ghost” tax preparers are, but the Department of Justice has shut down four tax preparers for unscrupulous practices in 2022 alone. If your tax preparer doesn’t sign your return or designates it as a “self-prepared” return, beware. Paid preparers are required to sign and not doing so is a major red flag of malicious intent.

  1. Phishing Scams

Phishing scams use unsolicited communication to try to get information or money from you—or sometimes both. You could get a text message or email from “the IRS” telling you to click on a link to check your tax refund or stimulus payment status. But the link leads you to a webpage asking for personal information to steal your identity. Or you could receive a phone call from someone claiming to be from the IRS about an unpaid tax bill. The caller may even tell you a lot of information about yourself, like your full name or date of birth, to gain your trust.

The IRS primarily uses snail mail to contact taxpayers and never sends texts or emails. Scammers would call and say, “you didn’t pay all your taxes and you need to take care of it right now”. They may ask you to provide a credit card on the spot or run Walgreens and get a gift card.

  1. COVID Tax Scams

According to the IRS, COVID-19 and stimulus payments have resulted in an uptick in fraudulent text messages and emails. Ignore them. Like other financial institutions, the IRS will not call or email you about financial matters unsolicited. If you suspect it’s a scam, report phishing and online scams at https://www.irs.gov/privacy-disclosure/report-phishing.

  1. Play it Safe

Safeguard your personal and account info. Don’t carry your Social Security number with you and lock it away at home. Be wary online, especially when using a public wi-fi connection, and shred all sensitive documents. Add an extra layer of security. Many banks and financial services providers allow you to add a rolling security code or text-generated notification to your phone. Those can protect you even if a criminal cracks your password.

Have questions about a call, letter or inquiry? Go to the source by calling the IRS at 800-829-1040. Don’t use a number provided by a third party. You can check this one at the IRS website. When you call the IRS, you may be on hold for a few minutes, but consider this while you’re waiting: In addition to answering phone calls and processing tax returns, the IRS is busy protecting taxpayers from fraud.

Topics: Security, Technology, Cyber Attacks, Ransomware, Strategy

Contact Us  See how Lloyd can help grow your business.  Let's Get Started!