Critter Corner: Beware of Tax Season Scams!

Dear Raider,

A friend of mine told me that there has been an uptick in tax season scams, where identity thefts and refund thefts are taking place. What is this all about so we can stay vigilant?

Thanks for your help!

Rhee Fundthefft

—

Dear Rhee,

Unfortunately, this is correct. Last year, the IRS received 294,138 complaints of reported identity theft during tax season, the second most in its history!

In order to process your tax return, the IRS asks for some personal information to verify your identity, including your home address and Social Security number. With data breaches and identity theft being rampant, scammers are using other’s identities to steal tax return money. According to Eva Velasquez, CEO of the Identity Theft Resource Center, a nonprofit that helps victims of identity theft, “(w)ith the state of data breaches, we should all be operating under the assumption that all the data necessary to file a fraudulent tax return in your name is out there.”

Stop Tax ID theft Before it Starts

Just because some would-be thieves may already have your personal information doesn’t mean you should make it any easier for them. Luckily, there are things you can do to make you more likely to avoid becoming a victim. You can take some security precautions into your own hands, as I will describe.

Many victims only learn they’ve been scammed when they go to file their tax return and realize someone already did so in their name. Here’s what you can do to stop this from happening:

• Beat fraudsters to the punch and file as early as possible.
• Block scammers by having the IRS send you a unique code, called an Identity Protection PIN (IP PIN). Similar to a two-factor authentication code, the IRS IP PIN provides security by requiring a code only you should have access to.
• Don’t provide information to someone claiming to be from a government agency:
  • The IRS never initiates digital contact with taxpayers to ask for their personal information. Anyone who asks you for that information via text, email, or social media and claims to be the IRS is lying.
  • The IRS also never asks for credit or debit card numbers on the phone.
  • Even if a call appears to be coming from an official-seeming number, such as the one on the IRS website, it’s easy for scammers to spoof the number they’re calling from.
  • The IRS exclusively accepts payment in U.S. dollars. It will also never insist you pay it via a gift card or cryptocurrency. The real IRS won’t even accept those as payment!
  • If you’re still confused about whether someone you’re communicating with is really affiliated with the IRS, you can always call or ask the ITRC (Identity Theft Resource Center) directly for free advice.

If You Are a Victim

If someone files a false return in your name, you should immediately report it to the government. The Federal Trade Commission’s identitytheft.gov is designed to help victims. It helps fill out the appropriate paperwork with the IRS and offers resources on other types of identity theft.

Hope this helps!

Raider