NEW YORK — As tax season rolls around, the risk of falling victim to scams increases significantly. Scammers aim to capitalize on both your information and financial assets during this critical time.
All year long, fraudsters employ numerous tactics to steal identities, money, or sensitive details. As the deadline for filing your annual tax return approaches on April 15, experts urge people to be particularly vigilant. The recent job cuts at the U.S. Internal Revenue Service (IRS) offer scammers new opportunities to exploit consumer uncertainty. With these workforce reductions, questions arise about the agency’s capability to respond effectively to scams being reported.
In identifying tax scams, be wary of several telltale signs. Scammers might reach out through fake emails, messages, or calls impersonating the IRS. They often use social media offers promising unrealistically large refunds. Red flags include a sense of urgency, isolation tactics, threats, promises of large sums of money, and suspicious links. Cyber experts highlight that scammers prey on emotion, attempting to stir feelings of fear or uncertainty. They may pressure you to act quickly or suggest legal trouble if you don’t comply. Scammers can also try to isolate you from seeking advice from trusted sources.
Ghost preparers represent one method of scam, charging fees for completing your tax return with the promise of maximizing your refund. These preparers might file fraudulent returns under your name with inflated claims, redirecting the funds to themselves. Keep in mind, the IRS does not initiate contact through emails, texts, or social media for personal information, and it is recommended to work with accredited tax professionals for filing assistance. Victims of scams should report them promptly for further action by the authorities.
This year, scammers may find an easier target in the news surrounding IRS cuts. Experts warn that these changes could be exploited to offer new false filing methods under the guise of IRS updates. Such tactics were prevalent during the COVID-19 pandemic and subsequent federal aid disbursements when false claims about benefits like additional stimulus checks emerged.
Another concern is the IRS’s reduced ability to deal with scams due to downsizing, potentially delaying the removal of harmful websites and campaigns targeting unsuspecting taxpayers. Chris Pierson, CEO of BlackCloak, emphasizes the critical nature of maintaining oversight amid these changes, as diminished resources could increase consumer risk.
A growing sophistication in scams is observed with the use of generative artificial intelligence, enabling the creation of hyper-realistic phishing messages, including deepfakes, allowing scammers to automate and scale their attacks. Recent high-profile data breaches pose further threats, as leaked personal information can be used for fraudulent filings and other scams.
To protect yourself, experts recommend filing taxes as early as possible to reduce the risk of scammers filing under your name. Stick to familiar methods, whether it’s an online service or a trusted accountant. Securing your past filings with strong passwords and using a VPN on public networks enhances your protection. The IRS suggests setting up an identity protection PIN and freezing your credit as additional protective measures. Credit freezes prevent the opening of new accounts under your name and can be managed with the three major credit bureaus: Equifax, Experian, and TransUnion.
Remember, the IRS will not contact you randomly via email, text, or phone. Always verify communication through the official IRS website and act cautiously when receiving unsolicited messages or offers. Taking a pause before responding to potential scams, and evaluating their validity, is crucial. Dave Chronister, CEO of Parameter Security, reminds us that anyone is susceptible to scams due to their emotional nature, emphasizing the importance of a consistent vigilant mindset without succumbing to panic.