Did You Know? Fraud and Tax Season

February 29, 2024

Scammers love tax season. It provides them with the opportunity to trick people into revealing their personal and financial information. Be wary of any unsolicited emails, phone calls or text messages claiming to be from the IRS or other tax entities. Also, be skeptical of any promises of big refunds or threats of legal action. If it sounds too good to be true, or unbelievably urgent, it probably is.

Scammers uring people to use fake wage information to claim false credits:

In March of 2023, The Internal Revenue Service issued a consumer alert to warn taxpayers of new scams that urge people to use wage information on a tax return to claim false credits in hopes of getting a big refund.

One scam, circulating on social media, suggests people use tax software to manually fill out their W-2s, made-up income with inflated withholding figures, and a made-up employer. They then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund, due to the large amount of withholding.

Additionally, we are seeing taxes being filed fraudulently before our members can file for themselves.

This year, we’ve encountered instances where members attempting to file their taxes were informed either that they had already filed or that they couldn’t proceed due to a duplicate social security number.

So what can we do to protect ourselves from tax fraud?

  • File your taxes early. By filing early, you reduce the window of opportunity for scammers to file a fake return using your info. If it’s too late for you to file early, consider filing for an extension to give yourself more time to prepare your return.
  • Keep your Social Security number (SSN) safe. Your SSN is a valuable piece of personal information for identity thieves. To keep it safe, avoid carrying your Social Security card with you and never unnecessarily share your SSN. When filling out tax forms, double-check your SSN to ensure it’s accurate. If you suspect your SSN has been compromised, contact the Social Security Administration ASAP! Additionally, if you receive a notice from the IRS suggesting that someone else has already filed a return using your SSN, contact the IRS and follow their instructions to resolve the issue.
  • Use strong, unique passwords when filing taxes. Your online tax accounts contain sensitive information, so it’s important to use strong passwords that are difficult to guess. It’s also essential to use different passwords for each account. This way, if one account is compromised, your other accounts won’t also be at risk. Finally, enable two-factor authentication whenever possible to add an extra layer of security to your accounts.
  • Be wary of phone scams. Phone scams are a common tactic used by scammers to trick people into revealing their personal and financial data. These scammers often pose as IRS agents and threaten legal action if you don’t pay an alleged tax debt immediately. If you receive a suspicious call, hang up and report it to the IRS.
  • Secure your mailbox. Identity thieves do more than just steal your online info. They also look for sensitive information in mailboxes. Make sure your mailbox is secure and is emptied daily. For the best security, consider using a locked mailbox or a P.O. box to protect your mail.
  • Know how the IRS will contact you. Most contact from the IRS will come directly to you through the mail, but in some cases they may call or visit a business. To learn more, visit: How to know if it’s really the IRS | Internal Revenue Service.
  • Use secure Wi-Fi networks. When filing your taxes online, be sure to use a secure Wi-Fi network to prevent hackers from intercepting your information. Avoid using public Wi-Fi networks, as they can be easily compromised. Instead, use a secure, password-protected Wi-Fi network you trust.
  • Work only with legitimate tax preparers! A legitimate tax prep will be willing to sign your return and provide their IRS Preparer Tax Identification Number (PTIN). They also will never ask you to sign a blank return form. For more information on how to choose a tax preparer please see the IRS’s Tax Tip on Tax Preparers.
  • Review your tax return carefully. It’s important to always review your taxes carefully before signing off on them. Remember, you are legally responsible for what is on your tax return.
  • Stay alert to scams that use the IRS as a lure. Tax scams can happen any time of year, not just at tax time. For more, visit ‘Tax Scams and Consumer Alerts‘ on IRS.gov.

What can you do if you think you’re a victim of tax fraud?

  • Call or text us at 315-782-0155 so we can help you navigate next steps.
  • If you’ve been impacted by fraudulent activity, you can file a complaint online with the IRS HERE.
  • You can initiate a credit freeze with each of the credit bureaus.
  • Sign up for EZShield, a market-leading identity monitoring company offering 24/7 identity theft monitoring and restoration services. For just $4.99 each month, EZShield monitors you and your family’s personal information and alerts you to potential fraudulent activity related to your identity.

The IRS does not initiate taxpayer communications through email, text messages, and social media. Unsolicited messages claiming to be from the IRS, or an IRS-related component, should be reported to the IRS at phishing@irs.gov. 

Sources:

IRS – IR-2023-38. “IRS warns taxpayers of new filing season scams involving Form W-2 wages; those filing fake returns face potential penalties, investigation.” IRS.gov, March 3, 2023, href=”https://www.irs.gov/newsroom/irs-warns-taxpayers-of-new-filing-season-scams-involving-form-w-2-wages-those-filing-fake-returns-face-potential-penalties-investigation.