Beware: Tax Scammers Disguised as the IRS

The frequency of malware and phishing incidents rise during tax season as tax scammers catch consumers in their traps.

Text messages and emails are used during tax season to lure unsuspecting taxpayers into sharing personal information with fraudulent actors posing as the IRS. These imposters are now targeting not only consumers, but also tax preparers, human resource and payroll staffs, and even schools, according to the IRS.

The fraudsters’ tactic often begins with impersonating an employee of a tax software provider, government agency, bank, or credit card company, tricking victims into believing they are trustworthy. Next, they hack into email systems or create fake websites that mimic legitimate ones but have fake login prompts.

Those who fall victim to the scams provide confidential data including passwords, Social Security numbers, or other sensitive financial information.

IRS Commissioner John Koskinen warns that the email schemes are always evolving and can fool even those who are cautious. He advises people not to be fooled by emails relating to sizable refunds, tax bills, or any personal information since that isn’t how the IRS communicates with taxpayers.

One type of scam uses an email subject line of “Access Locked” and declares taxpayers cannot access their tax preparation software accounts. It says the accounts are suspended due to errors in security details and suggests tax professionals remedy the issue by clicking on an “unlock” link that requests a username and password, enabling the scammers to access to more personal information.

A record number of data breaches transpired in 2016, with over 3 billion records stolen, equivalent to 8.2 million per day and 2 of 3 people who used the internet, according to Joseph Carson, chief security scientist at Thycotic. Yikes.

Cyber criminals then use that data for targeted attacks including identity theft, fraud, and W-2 phishing. The phishing emails are difficult to detect because they are so personalized.

Remember, if the IRS needs information from you, they will contact you directly, and not via email, text message, or social media. The IRS collaborates with the Department of Justice to fight scammers and pursue criminal prosecution, and with state revenue departments and tax professionals to spread awareness about potential fraud.

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