Even as the 2023 tax season crosses the second month, there is a rising concern about the increase of scammers this tax season. ISAC, which shares information about tax refund fraud and identity theft in its 2022 annual report, had written about difficulties during the 2022 income tax filing season.
This tax season it has become increasingly common for scammers and other identity thieves to file false claims and take advantage of programs that were part of the relief programs established during the pandemic that include tax refunds. This is seen in the increase in the number of attacks from every possible vector through stolen identity thefts and elaborately mounted false returns.
Lit has become more important for monitoring agencies to detect fraudulent schemes early and share industry information fast. Through ISAAC many taxpayers were protected from damage and financial losses from new alert schemes.
Identity theft and income tax refund scams are intricately linked and will not go away in a hurry. There have been multiple attempts to steal from the tax system. Though the authorities have achieved multiple successes, the number of attacks has been increasing each year. they are growing large both in terms of volume and in the number of attacks initiated. The attacks are also way more sophisticated and have afflicted other core business sectors, including social media scams and supply chain scams.
The report disclosed that 8 million tax forms were found to be suspicious and required further scrutiny in 2022 alone. It was a 4-fold increase from 2 million in 2021. Experts say that it was more to do with incidents around us. and our protection is primarily dependent on what form of safeguards we use to protect our documents, and also the kind of software we use.
But more than that it also depends on how much careful we are in not revealing details to strangers posing as government officials and scamming us of our money and personal information. And at times the theft of personal information can be more ruinous in the long run as it can be used to commit major crimes without revealing the true identity of the criminals.
Experts say that there has been an increase in stolen identities this tax season as more scammers have entered the field and they are getting more sophisticated at their job. Even as security experts come up with ways to secure your personal information, scammers are right on top of it and come up with more resourceful ways to scam you of your personal information and money.
Creating ways to access your personal information and getting to your data is possible only when you slip up and reveal information. So it becomes a tussle between the scammers bent upon cheating you and your resolve to protect your personal information.
Some Common Scams That Are Prevalent In The Tax Season
It is important to note that tax scams can continue throughout the year and you should take necessary precautions. If you are doing your income tax return online this tax season.
Like most filers, you should use strong passwords with a combination of letters, numbers, and symbols. You should also go for computer firewalls and two-factor authentication. You should also use an Identity Protection PIN, also called an IP PIN. This will prevent scammers from filing your tax return this tax season as you and the IRS will only have access.
Please note that only one tax return can be filed with a social security number. So if a scammer makes use of your Social Security number and makes a tax return to steal your tax refund, you will find your number blocked when you try to file your returns this tax season.
All professional tax preparers have systems in place around all their systems. This ensures that the personal identity is protected round the clock. But if there is a situation where you get a notice from the IRS informing you that someone had already made use of your Social Security number and filed a return, make sure that you follow it up to the end and deal with it at the earliest. Some common tax scams that you need to be aware of during tax season.
Some of the common scams that you need to be on the lookout for this tax season include pandemic-related email scams. The COVID-19 pandemic continues to fuel a parallel outbreak of coronavirus scams. And the target is mostly the elderly.
By April 27, 2022, the Federal Trade Commission had already logged over 732,000 consumer complaints that were linked to COVID-19 and stimulus payments since the start of the pandemic. and over 70% of them were linked to identity theft or fraud. And the price was steep. These scams alone cost consumers $778 million with a median loss of $415.
Criminals used the full range of the scammer’s preferred tools. This included bogus social media posts, imposter schemes, phishing texts and emails, robocalls, and many more. They were well aware of the latest headlines and adapted their tactics and messages to every new economic and medical issue.
False Promoters Offering Services This Tax Season
The IRS has warned of false tax schemes and tax return preparers offering their services. These promoters peddle false assurances of massive tax deductions and underhand arrangements. These promoters frequently change their tactics, enabling them to stay one step ahead of the authorities and the security systems.
Such promoters are known to prepare statements relating to gross valuation overstatement or benefits fully realizing that they are fraudulent and criminal. And it is the filer who gets to face the music once the IRS detects such fraud. There are also impersonation scams that appear to primarily target educational institutions and charities.
IRS imposters are sending phishing emails and texts to filers with .edu email addresses informing them that they have information about their tax refund payment. And they are really after your personal information. Faculty of educational institutions, college students, and other staff members all are potential victims and need to pay close attention to such scam attempts.
Scammers sent emails with subject lines such as Tax Refund Payment or Recalculation of Tax Refund Payment. The emails tell you to click a link and complete a form to claim a refund.
