March 1, 2018
As we enter tax season, it's important to be aware of the tax identity-theft scams targeting the public this year. Tax identity theft has been a massive threat for years. Recently, however, the IRS has made progress on catching fraudulent tax returns before money is paid out. Last year, the IRS stopped $4 billion in fraudulent tax returns. This year, it may be a different story.
Experts worry that this tax season could bring more fraud than weâ€™ve seen in recent years. The reason? The Equifax breach exposed 143 million consumerâ€™s Social Security numbers and other personal data. That other personal data was just discovered by Congress to include tax identification numbers.
The amount of personal data exposed makes it easy for tax identity thieves to file fraudulent tax returns in your name, collecting your tax refund check for themselves. The best way to protect yourself from this threat is to file your taxes as early as possibleâ€”before the thief has time to file in your name.
If a tax return has already been filed with your information, the IRS will alert you. If you file your taxes online, you will be notified right away. If you send your documents in through the mail, you will receive notice via a mailed letter. If someone has filed in your name, be sure to alert the IRS of the fraud immediately by filling out Form 14039.
But itâ€™s important to be on the lookout for other tax scams as well. The IRS is already reporting on a multitude of scams this season. For example, in one scam a fraudulent tax return is filed in the victimâ€™s name and the check is deposited in their account. The victim is then contacted by a thief posing as a debt collector who informs them that the deposit was a mistake and the funds must be paid back immediately.
Scammers claim to be calling from a company called DebtCredit and have created a realistic-looking website that they direct victims to visit. The website includes a video that explains the frequency of mistake payments from the IRS and references personal information of the victim such as Social Security number and bank routing information. The webpage also shows details of the debt collector, including a photo, name, telephone number, and email address.
This scam, in particular, is believed to have begun with phishing messages targeting tax preparersâ€™ offices. Experts believe that malware was loaded onto tax preparersâ€™ computers and was designed to steal information saved on the device.
Itâ€™s important for tax preparers and individuals keep an eye out for scams over the next few months. Remember that the IRS will only contact you via mail about an issue. If you receive a call or an email and you are unsure, hang up and call the IRS directly to inquire.
Emerging threat: Social Security benefits stolen by thieves
Security expert Brian Krebs reported on a new trend this month that involves a coupleâ€™s Social Security benefit being stolen by a hacker. The couple had created an account online with the Social Security administration but were delaying collecting their benefit. The wife then received written notice she had successfully signed up for benefits and that $11,000 would be transferred out of her SSA account. But she never requested this. It was later discovered that a thief had impersonated the woman by calling the SSA and signing up to receive her benefits. Creating an account at MySSA.gov is important, as it prevents others from opening an account in your name. However, as this story illustrates, you must continue to check your account regularly to protect your benefit. As always, stay alert!
Sincerely, Kohlhepp Investment Advisors, Ltd.
Source: Savvy Cybersecurity, Horsesmouth