With the significant 2017 cybersecurity leaks involving the personal information of millions of Americans, this year’s tax season is expected to be one of the worst ever for tax scams. Aside from cybersecurity leaks, scammers also target HR departments via emails requesting employee information while posing as the IRS, which has corporations on edge to maintain the security of employee information.
This year’s tax season officially opens January 29th, 2018 and runs through April 17, 2018 and scammers are ready and waiting to file tax returns in the names of other people. Hundreds of thousands of people will file their taxes this year expecting a return, only to find out the return was sent somewhere else. What can you do to protect yourself?
The sooner you file, the better chance you have to get ahead of the scammer who will likely file multiple returns.
File Electronically with Request for Direct Deposit
Electronic filing is faster than paper filing. Secondly, select direct deposit into your bank account to offset the chance your paper check will be stolen from your mailbox if you are expecting a return. Mailing the tax return your filing from your mailbox increases the chance of your return being stolen.
Never disclose personal information over the phone
In the height of tax season, the most common version of tax scams happen over the phone. You might receive calls the claim you owe money to the IRS, and must pay immediately. Often the callers are aggressive and will demand verification by way of personal details including your social security number. The IRS will never call you asking for personal information, make any threats, or ask for immediate payment. If you feel like you might be receiving a scam tax call, you can always contact the Treasury Inspector General for Tax Administration for information on protecting your financial data.
Know your rights as a taxpayer
The concept of taxation with adequate representation was one of the founding principles of the United States of America. Every American citizen should be familiar with the Taxpayer Bill of Rights, which includes everything from your right to privacy and confidentiality, to the right to challenge the IRS’s Position and Be Heard. The best thing you can do to protect your rights (and by extension, your financial security) is to first know them! Working with a trusted tax professional will ensure your rights are top priority.
Protect your digital identity
In a fraud scheme known as “Phishing” scammers will send email messages to try and solicit personal and financial information. These are designed to trick you into thinking that these requests are coming directly from the IRS. With increasing modern technology, these digital scams have also extended into text messages that include links to fake websites that are designed to mirror the real IRS website. A good way to verify a real government site is to always check the url, as an official government site will always end in “.gov”. However, as a general rule of thumb, remember that any request via email or text directing you to “update your IRS e-file immediately” are not coming from the IRS, and you always have the opportunity to report and verify any concerns.
Verify any government agencies who attempt to contact you
A recent scam attempting to steal information involved taxpayers receiving emails from the Taxpayer Advocacy Panel regarding a refund. The TAP is a volunteer board that works with the IRS and doesn’t have (or require) any access to taxpayer data. Knowing how government agencies will contact you and represent themselves is a great way to protect you and your refund. The IRS advises citizens on how to identify a government employee if you are ever visited in person by someone stating they are from the IRS. A true IRS representative will have two forms of credentials and a dedicated IRS phone number you can request to confirm their identity. If the person is not able or unwilling to provide that information, that should be your red flag to identify fraud!
Run your Credit Report
Your credit report will contain an active address for you and previous addresses. If you see a discrepancy and unknown address in your profile, you may be the target of a scam. Alert the credit reporting agencies immediately, and all companies where you have credit.
At Trajan Wealth, we understand the important connection between proper tax preparation and successful retirement planning. If your current advisor isn’t aware of the current tax laws that apply to you, you could be placing your retirement at risk. Contact Trajan Tax to find out more.
*Advisory services offered through Trajan Wealth, L.L.C., an SEC registered investment adviser.