Tax Season is Prime Time for Scams
Tax season is a high-stakes period, not only for filing returns but also for the increased risk of scams. With the IRS facing uncertainty, experts are urging taxpayers to be extra vigilant in protecting themselves.
If you’re like most Americans, you’re likely concerned about the potential for identity theft during tax season. Scammers may attempt to file fraudulent returns in your name to collect your refund, a situation that can take two years or more to resolve.
Protecting Yourself from Tax Scams
Experts recommend several steps to protect yourself:
- File Early: Filing your taxes as soon as possible reduces the window of opportunity for scammers to file a return using your Social Security number.
- Identity Protection PIN: The IRS offers an Identity Protection PIN (IP PIN), a six-digit number that you can request from the IRS website. This acts as a two-factor authentication for your tax return.
Understanding the Risks
Tax season attracts scammers, who use various tactics to steal your identity, money, or sensitive information. Experts emphasize the importance of staying alert as you prepare your annual tax return, which is due April 15th.
This year, scammers may exploit the uncertainty created by recent workforce cuts at the IRS. These layoffs could potentially impact the IRS’s ability to respond to reported scams.
Identifying Tax Scams
Be aware of these red flags:
- Sense of Urgency: Scammers often pressure you to act quickly.
- Isolation Tactics: They may try to prevent you from contacting others.
- Promises of Big Payday: Scammers often promise a large return.
- Suspicious Links: Avoid clicking on questionable links.
Cybersecurity experts say that scammers prey on emotion, often attempting to evoke fear or uncertainty. They may threaten arrest or pressure you into immediate action. Be wary of anyone preventing you from contacting trusted advisors.
What’s Different This Year?
Scams are becoming more convincing, especially with the use of generative artificial intelligence (AI). Experts warn of “hyper-realistic” phishing messages, including AI-generated videos and audio, which scammers can use to target more people through automation. Also, high-profile data breaches, like the National Public Data breach, could lead to an increase in fraudulent filings.
Dave Chronister, a prominent “ethical hacker” and CEO of Parameter Security, noted that uncertainty around the IRS cuts is an emotion that scammers will try to exploit. Scammers might falsely promise taxpayers “new” ways of filing.
The IRS has listed the “Dirty Dozen” of common tax scams to watch out for. The agency did not immediately comment on whether the recent workforce cuts would impact its enforcement resources.
Protecting Your Information
- File Early: Speed is essential! File your taxes early before scammers file in your name.
- Use Trusted Services: Stick to the tax preparation services and accountants you know and trust.
- Secure Your Data: Password-protect all downloaded past tax filings and use a VPN on public Wi-Fi.
- Identity Protection PIN: Set up an IP PIN to protect your information.
- Credit Freeze: Consider freezing your credit.
Remember, the IRS will never contact you via email, text, or phone to ask for your personal information. Always go to IRS.gov and reach out to them directly.
Dave Chronister recommends taking a moment to consider if something seems too good to be true. “Take a breath, count to 10 and then go, ‘OK … is this too good to be true?’ ‘Is my gut telling me something is off?’”
Social engineering relies on emotion, not intelligence. Stay vigilant, but don’t panic. Trust your instincts.
