Beware of these tax scams

By Kevin Theissen

Each year seems to have new scams designed to steal your tax refund. Each tax season, thousands of people are victims of fraud.

In these scams, fraudsters trick their victims into giving them enough information to file a fraudulent tax return in their name and direct the refund to a different bank account. When the victim goes to file their return, they are notified that a refund has already been sent.

In many cases, scammers will impersonate the IRS to obtain this information. It is important that everyone is aware of these scams and knows how to protect themselves.

Text message scams

This year, the Internal Revenue Service warns taxpayers of text messages appearing to come from the IRS. The message may ask you to click to view your refund status or account details. Instead, the text message is from a scammer attempting to gather your personal information.

Keep in mind that the IRS will never send you a text message. If you do get a text message that appears to be from the IRS or related to your taxes, do not click on any link. Delete the message immediately.

Phishing scams

A very common ploy of tax scammers has been phishing emails to lure taxpayers into sharing personal information. The fake emails appear to come from the IRS and ask you to share personal information. Again, know that the IRS will never contact you by email. Snail mail delivered by the USPS is the IRS’s main form of communication.

If you get an email that appears to come from the IRS, do not click on any links or open any attachments. Delete the email immediately.

Recently, there has been an increase in spear-phishing attacks directed at EAs, CPAs, tax attorneys and other tax preparers. In this scam, they target tax professionals with emails that appear to be from the IRS or a tax software vendor. The goal is to gain access to the tax professional’s clients’ information to file countless numbers of fake returns. Not only should tax professionals be on the lookout for these emails, but clients should also be cautious opening emails from their tax preparer. If you have any doubts, just pick up the phone and call.

Protect yourself

It’s important to be aware of the tax scams — and there are steps you can take to help protect your tax return. A few years ago, the IRS introduced Identity Protection PINs (IP PINs) to help protect taxpayers. IP PINs are 6-digit numbers that prevent someone else from filing a return in your name. You must submit your PIN to verify your return.

When IP PINs were first introduced, they were only available to proven victims of identity theft or residents of certain states. Now, anyone can apply for an IP PIN. You can obtain an IP PIN on the IRS website. You will need to prove your identity by answering some questions.

Once you are set up with an IP PIN, you will receive a new one each year. It will be available in your online IRS account so be sure to protect that with a strong password. You or your tax preparer will submit your IP PIN when you sign and submit your return.

Kevin Theissen is the financial advisor and educator at HWC Financial in Ludlow.