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Thousands of consumers and businesses have lost millions of dollars and their personal information to tax scams. Scammers use the mail, telephone, or email to deceive individuals, businesses or payroll and tax professionals.

There are several tips to keep in mind when working on your taxes. One of the most important is to file as early as possible.

This is significant, if your social security number has been stolen in any data breach, ever. The social security number is used in filing taxes. So, once it is stolen, cyber criminals can use it to try to file your income tax return on your behalf. A refund will go to the hackers rather than you. If you do not expect a refund, cyber criminals can lie on your return and get your refund anyway. The IRS says the earlier you file your own taxes, the less likely someone else will get to it first.

PHISHING and ONLINE SCAMS

Phishing (as in “fishing” for information) is a scam where fraudsters send email messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal a victim’s identify.

• Watch for income tax related phishing scams during tax season. Sometimes, they make threats and insist you send a payment. Emails often pretend to come from the IRS, and may use the IRS name or logo or include a link to a bogus website intended to mirror the official IRS website to try to gain access to consumers’ information to steal their identity and assets. These emails often have subject lines such as “IRS Taxpayer Notice” or “IRS Important Notice.”

• Sometime, you may get a phone call from someone saying they are from the IRS, that you owe money, and to escape a large fine or jail, your payment card number is needed.

The IRS does not initiate contact with a taxpayer via email, text message, social media channels or the telephone. Should the IRS need to get in touch with you, they will mail a paper letter, using the United States Postal Service. If you have any doubt, call the IRS using a phone number you can find on the government agency’s website for your particular issue.

TIPS to FIGHTING SCAMS

• Take time to read email messages, regardless of whom the sender may be. If there are typos or spelling and grammar errors, be suspicious. Often, fraudsters do not properly use language, leave out words or write a phrase in an odd way.

• Do not click on links in a suspicious email or website. Hover over links to reveal their true URL.

• Do not open attachments if you cannot independently verify the authenticity of the sender. This applies whether the email comes from a stranger, a vendor, a co-worker of a family member. Attachments can contain malicious code that may infect your computer of mobile phone.

• Don’t be the victim of a “ghost” tax return preparer. The IRS warns taxpayers to avoid unethical tax return preparers, known as ghost preparers.

• The IRS also warns of impersonation scams, urging consumers and businesses to remain vigilant as criminals use telephone numbers that mimic IRS Taxpayer Assistance Centers to trick taxpayers into paying non-existent tax bills. A sophisticated phone scam employs callers claiming to be IRS employees who use fake names and bogus IRS identification badge numbers. They may know a lot about their taxpayer targets, and usually alter the phone’s caller ID to make it look like the IRS is calling. Never provide any information and hang up.

Victims are told they own money to the IRS and must pay promptly through a gift card or wire transfer. Victims may be told they have a refund due to try to trick the taxpayer into sharing private information. If the phone is not answered, the scammers often leave an “urgent” callback request.

A strategy taxpayers may want to consider is the installation of call-blocking software.

• Some taxpayers receive emails that appear to be from the Taxpayer Advocacy Panel (TAP) about a tax refund. These are a phishing scam, trying to trick victims into providing personal and financial information. TAP is a volunteer board that advises the IRS on systemic issues affecting taxpayers. TAP never requests, and does not have access to, any taxpayer’s personal and financial information.

SCAMS TARGET TAX, PAYROLL PROFESSIONALS

Increasingly, tax preparers and payroll professionals are being targeted by identity thieves. These criminals – many of them sophisticated, organized syndicates – gather personal data to file fraudulent federal and state income tax returns. The IRS warns these professionals and Human Resources Departments to be on guard for phishing emails targeting them for payroll direct deposit and wire transfer scams.

Scammers are posing as professional associations and mimic software providers to steal data such as Preparer Tax Identification Numbers (PTINs), Electronic Filing Identification Numbers (EFINs) or e-Service passwords. Bogus email asks tax professionals to update their IRS e-Service portal information and EFINs.

Diligently check your credit reports. Request one report every four months from a different one of the three major bureaus (Experian, Equifax, TransUnion). That will help you keep better tabs on any potential fraud.

Report any suspicious activity to the IRS at [email protected] Forward, with the full email headers, any suspicious email to the IRS, then delete the original email.

So, be on the lookout, and file those tax returns early.