The beginning of a new year marks the beginning of tax season. For most people, this is a mad scramble of W-2s, W-4s, 1098s, 1099s and more. For employees and business owners alike, tax season can be stressful and time-consuming. Criminals are very aware of this, and they are able to use the hectic season to create a little chaos of their own. Tax scams are becoming more common, and it’s important to stay as diligent as possible in regards to data privacy and cybersecurity. Many taxpayers fall victim to these attacks because they have misguided information on how to file or they are looking for shortcuts. Here’s a handful of facts to consider when filing your taxes this year:
The IRS will never email you
Along with text messages and social media, the IRS never uses email as a form of communication. Oftentimes, criminals will use phishing tactics as a way to intercept tax documents. They impersonate the IRS by asking users to confirm personal information or verify personal identification. Don’t submit your information to these faulty emails. Avoid links in these emails as well, because they are typically laced with malware.
The IRS primarily uses USPS to communicate with taxpayers
Tax criminals are masters of disguise when attempting identity theft. They will often use phone scams as a way to convince taxpayers to submit their personal information. These IRS impersonators will use an array of fake names, made-up titles, and a jumble of numbers they pass off as a badge ID. Like almost all tax scammers, they use scare tactics such as aggression and threats to try forcing the victim to relinquish their data immediately. If you are faced with a situation like this, do not respond. The IRS almost always uses the U.S. Postal Service as a way to communicate with tax payers. There are a few specific scenarios in which the IRS will reach out through phone call. These include the following:
- In regards to overdue tax bills
- In regards to securing a delinquent tax return or delinquent tax payment
- In regards to touring a business for an audit or in regards to a criminal investigation
Even when the IRS reaches out through phone calls, taxpayers should receive several notices in the mail. If you are contacted by someone claiming to be the IRS without having received a notice, don’t entertain the caller.
The IRS will never threaten with local law enforcement
Another scare tactic that scammers use is the involvement of local police and immigration officers. These scams involve the criminals telling the victims that they will face arrest and conviction if payment is not made immediately. It’s important to steer clear of these calls.
For more information on how the IRS contacts taxpayers, visit their website.
Knowing the facts on IRS communication is the first step to staying safe during tax season. Based on this knowledge, there are several actions you can take that will ensure your information stays locked down and out of the hands of tax scammers.
Find a tax preparer you can trust
A certified tax preparer can be a very beneficial investment for an individual or a small to mid-size business. The first (and most important) aspect of finding a quality preparer is conducting research on all potential candidates before engaging in business. Confirm their identification number with the Better Business Bureau and ask a trusted business owner who has worked with the tax preparer in the past. Tax professionals are primary targets of criminals. This is why it’s crucial to know the updated data protection plan of a tax preparer before proceeding.
Filing your taxes early is probably one of the most recommended practices of any certified tax preparer. This is a good practice for multiple reasons. The longer someone waits to file their taxes, the more susceptible they become to an attack. Scammers are looking for any crevice that would allow them to obtain confidential information regarding an individual or a business. Then, under the taxpayer’s or business’s name, they are able to intercept tax refunds. Filing early eliminates the time for scammers to create scare tactics or phishing campaigns. It also puts the taxpayer in the driver seat of handling their taxes instead of scrambling at the deadline and increasing the possibility of data compromise. Many businesses choose to pay later due to inability to pay. Instead of waiting, contact the IRS about payment plans and options that speed up the filing process and mitigate risk.
Physically protect your information
A common mistake among taxpayers is lack of organization and physical security on sensitive documents. Developing a secure filing system is well worth the time investment to secure your tax records. This also includes the physical security of social security numbers, invoices, and business receipts. Criminals look for any piece of information they can exploit to commit identity theft. Keep all physical records locked up and out of plain sight. If you keep a digital file of your records, you should keep the file locked with limited access privileges.
Don’t be misguided or deceived by criminals during tax season. With so many ways to access information, identity theft poses a major threat to businesses and taxpayers alike. Don't just focus on data security during tax season - make sure you’re making it an ongoing business priority by implementing preventative cybersecurity measures to protect your business.