Stay Safe As Tax Season Approaches
It’s almost that time of the year again – the tax season. While you’re probably looking forward to it with a mixture of dread and anxiety, cybercriminals are drooling at the prospect of all the sensitive personal data out there on the internet for the taking.
That said, the IRS recently released multiple bulletins pertaining to tax security awareness. This applies to various groups, including tax preparers, taxpayers, business owners, individual consumers, software providers, and state officials.
Whether you want to file your 2021 taxes now or wait until April 18, 2022, it’s the ideal time to polish up on the common scams that cybercriminals may try to execute this year. Their objective is often the same: seek financial gains by committing identity theft or stealing sensitive information.
Cybercriminals act fast to pursue financial gains, typically by filing fraudulent returns early in the tax season before legitimate taxpayers can do so themselves. The IRS anticipates several early filings of returns that contain accurate taxpayer details, including name, address, social security numbers, and even the victim’s bank account.
Some hackers will then target those victims again by posing as IRS or debt collectors reaching out about refunds that were sent mistakenly. The victims are usually asked to confirm their private information and then forward the money to another contact.
So, what can tax preparers and taxpayers do to ensure that they don’t fall victim to tax scams? Continue reading this post to find out.
Tax Season Safety Tips for Filing Returns Online
1. Ignore IRS Scam Calls
One of the most common tax scams is calls from people claiming to be from the IRS. These people usually threaten their targets with an arrest or lawsuit and require immediate payment. Remember that the IRS never calls people out of the blue, and if at all they want to get in touch with you, they usually send several letters before resorting to calls.
Suppose you’re not expecting a call from the IRS; the person on the phone claiming to be an IRS official is probably a scammer. It is crucial that you don’t entertain such calls at all and resist the pressure of acting quickly. Rather than panicking, you should go ahead and report the contact to TIGTA.
2. Be on the Lookout for W-2 Form Theft Schemes
While tax scams change every other season, early on in the tax period (January and February), businesses and consumers should be on alert for schemes that try to steal W-2 forms. Most often, the hacker poses as a company executive who emails managers or payroll reporters and asks for a list of employees and their W-2 forms.
Businesses usually don’t realize that they’ve been scammed in this fashion until an employee reports that a fraudulent tax return has been filed. Exercise caution when you receive suspicious emails; in case you’re not sure about the legitimacy of the communication, reach out to a representative at your company to double-check.
3. Beware of Phishing Emails
Phishing campaigns executed by cybercriminals are arguably the second most prominent IRS-related scam that flourishes every April. Phishing scams are typically conducted via unsolicited emails and websites that pose as being legitimate. They lure unsuspecting victims into providing them with personal and financial information.
To steer clear of phishing scams, you shouldn’t take emails from unfamiliar sources at face value. Also, you should manually type URLs into your browser before visiting websites that you aren’t sure about.
4. Follow the IRS’s Basic “Six Security Measures”
Regardless of whether you are a tax preparer or a taxpayer, you should heed the following security measures:
- Install anti-spam and anti-virus software that is dynamic and updates automatically.
- Use multi-factor authentication to add an extra layer of protection to all your online accounts.
- Employ a multi-layered security system that includes smart firewalls.
- Regularly back up your data in remote locations to preserve your company’s information.
- Use virtual private networks (VPNs) that safeguard all remote workers.
- Use end-to-end data encryption for all your data, both when it is at rest and in transit.
5. Use Acceptable Electronic Signatures
Taxpayers usually use different software for filing their tax returns. Even so, the IRS has certain requirements for electronic signatures. Here are the acceptable electronic signatures according to the IRS:
- A name typed on a signature block
- Signatures created by a third-party software
- A digitized or scanned image of a signature that’s handwritten attached to an electronic record
- A handwritten signature on an electronic signature pad
- A handwritten mark, command, or signature input on a display screen with a stylus.
6. Include Data Recovery and Security Incident Plans in Your Toolbox
Suppose you work as a tax professional, you may need to add extra layers of security to your systems. These include security incident and event management (SIEM) software, robust business recovery plans, and other accommodations. Suppose a fraudulent tax return is filed in the name of one of your clients, you may use form 14309-B to alert the IRS of the incident.
7. Keep Your Information Secure
Whereas personal information like date of birth, address, phone number, and full name can be easily accessed online, your social security number isn’t readily available on online directory pages. Avoid sharing your social security number (SSN) over the phone, not unless it’s necessary. Also, ensure that you keep documents that have your SSN, such as W-2, safely stored in a secure place. Finally, ensure that institutions that hold your sensitive information are doing a great job of protecting it from cybercriminals.
A Trusted IT Partner Can Help Protect Your Business From Tax Scams
With the tax season quickly approaching and many tax return filers just getting started with putting their forms in order, including W-2 and 1099, scam opportunities are bound to arise. During this period, it is important to be vigilant about protecting your information. That said, a trusted IT partner can help file your returns and safeguard your information.