How to Avoid Tax Season Scams & Fraud Attempts

It's tax season, and although we are all ready to cross that stressful task off our to-do lists, we must stay alert and recognize common scams and threats that can put our personal information at risk. Below is a list of helpful tips that you can use to protect yourself and your loved ones this tax season.

Tax Season Scams & Fraud Tips 

Update Your Devices

Improve security on your devices by keeping them up to date, especially when filing your taxes electronically. A device with the latest updates typically runs software that has remediated most common security vulnerabilities that could otherwise create unnecessary personal risks. If you are unsure how to update your device, there are typically update options in the General Settings of most devices.

Create Strong Passphrases

When setting up your accounts, create long, complex passwords and passphrases unique to each account and consider using a reputable password vault, such as LastPass, to manage them conveniently. Using the same password or passphrase across your accounts will increase the risk of unauthorized access to your personal information if one of those accounts becomes compromised. 

Select Security Questions Carefully

Security questions, which can be used to add an additional layer of protection on your accounts, or allow you to reset your passwords and passphrases or security settings, should be selected with caution. Ask yourself, "Have I made this information available on social media?" Could threat actors pull these answers from an online profile? It's imperative that only information that you would know is used for these questions, and as a reminder, be mindful of what you share on social media.

Enable Multifactor Authentication (MFA)

When available, enable multifactor authentication (MFA) on your accounts. MFA requires an additional verification step, such as a one-time code, for accessing your account and sensitive information. This extra layer of security will make it more difficult for prying eyes and threat actors to access your account.

Set Up an Identity Protection Pin (IP PIN) 

Protect yourself from identity theft by setting up an IRS Identity Protection PIN (IP PIN). IP PINs are six-digit numbers generated yearly that can be assigned to eligible taxpayers to prevent others from filing a tax return using your Social Security number. Once set up, the IP PIN is only known by you and the IRS and helps verify identity when filing an electronic or paper tax return. Consider retaining your IP PIN and other passwords and passphrases in a password vault. When setting up PINs other than those assigned directly by the IRS, avoid using your Social Security number or date of birth. 

File Your Taxes Early

We recommend filling your taxes as soon as possible, not only because it feels great to have them done but also to prevent someone else from attempting to file a return with your Social Security number. You can only file one return per Social Security number. When you file your return early, you reduce the chance that someone has the opportunity to file a fraudulent return using your information. For more information on recognizing identity theft and fraudulent returns, review the IRS's indicators here. 

Verify Your Tax Professional

When selecting a tax professional or service, there are several considerations everyone should address.

We recommend asking about:

  • The method of communication and transfer of personal information between you and your tax professional
  • The number of people who may have access to your information
  • Whether your communications will be encrypted
  • Whether your information will be backed up securely
     

Verify Payment Options

If you owe money on your taxes, verify the payment methods available to you directly from the IRS or your tax professional. Remember that the IRS will not send you an email asking for urgent payment or threatening to engage law enforcement if you do not comply with their request.

Exercise Caution Before Interacting with Suspicious Emails

Malicious emails are a common method used by threat actors to collect your personal information or deliver malware. Unfortunately, these malicious emails tend to be more prevalent around tax season. Due to the urgency of the email messaging, people are often intimidated by them and take action without thinking first.

These fraudulent emails may appear to come from the IRS and may suggest that you used the wrong form(s) when filing your return. The 'correct form' they offer may grant them access to your personal information if you interact with it. It's imperative to exercise caution before interacting with these kinds of emails.

Be Wary of Scam Calls  

Calls purporting to be from the IRS can be scary, but keep in mind that if the IRS needs to communicate with you about your tax return, they will start by sending you physical mail. Be wary of anyone who claims to be from the IRS, especially if they ask you to make a tax payment to a source other than the US Treasury. If you suspect that you received an IRS impersonation call, look up the direct number to the IRS online and call them to verify the call's legitimacy.   

Reporting Tax-Related Scams and Fraud 

If you're the recipient of a tax-related scam, reporting it to the FTC or IRS will help create awareness of trending scam tactics, which will help protect others from falling victim to these scams in the future. Below are some useful links to help you report fraud.

Additional Information & Resources