Tax scams and those who perpetrate them have increased in recent years. Many unsuspecting individuals have fallen prey to scams designed to steal confidential information. Those who are informed about such schemes are less likely to become victims.
The most prominent fraud threats are explained below.
Tax fraud involving stolen identities has become a growing problem. During 2012, the Internal Revenue Service (IRS) says it prevented nearly $20 billion in fraudulent refunds including those related to identity theft. This type of fraud is accomplished by criminals who steal personal information and then use that information to electronically file tax returns and claim tax refunds. Many times, an individual is unaware their identity has been stolen until their actual tax return is rejected by the IRS. Criminals usually target elderly residents and those who don't have an income tax filing requirement due to low income.
The IRS is implementing policies to better identify potential identity theft cases. These measures include: identity theft indicators, taxpayer notifications, locking personal tax accounts, and issuing personal identification numbers (PINs). The IRS has also developed a web page dedicated to identity protection http://www.irs.gov/uac/Identity-Protection.
If you discover you have become a victim of identity theft the IRS recommends you:
Phishing is the act of attempting to acquire confidential information by masquerading as a trustworthy entity in an electronic communication (e-mails, text messages, social media etc.). Many phishing campaigns pose as the IRS in an attempt to trick individuals into providing confidential financial information. The IRS advises that it will never contact taxpayers through email, text messages, or social media.
Some fraudsters will take advantage of individuals impacted by natural disasters by claiming that they work for the IRS and can help them claim a tax casualty loss. In reality, they use this as a way to steal personal and financial information.
For many, Social Security benefits are a primary source of income. Fraudsters are aware of this and target these individuals by calling their homes and informing them their benefits will be cancelled unless certain financial information (usually a bank account number) is provided.
Tax fraud and information security is a very serious issue. Bucheri McCarty & Metz understands this and is committed to securing our client's information. We constantly monitor our controls to ensure information is secure both physically and electronically. Individuals should also be vigilant about securing their personal information. We recommend the following practices to help secure your personal information:
Keep Personal Information Secured Online
Keep Personal Information Secured Offline