Even though reports of tax-related identity theft have declined in recent years, the Internal Revenue Service warns that this practice is still widespread and remains serious enough to earn a spot on the agency’s annual “Dirty Dozen” list of tax scams.
The Dirty Dozen is compiled each year by the IRS and outlines a variety of common scams taxpayers may encounter any time during the year. Many of these cons peak during filing season as people prepare their tax returns or hire tax professionals.
Tax-related identity theft occurs when someone uses a stolen Social Security number or Individual Taxpayer Identification Number (ITIN) to file a fraudulent tax return claiming a refund.
Criminals are devising more creative ways to steal more in-depth personal information to impersonate taxpayers. Taxpayers and tax professionals must remain vigilant to the various scams and schemes used for data thefts.
Business filers should be aware that cybercriminals also file fraudulent Forms 1120 using stolen business identities and they, too, should be alert.
Security Reminders for Taxpayers:
● Always use security software with firewall and anti-virus protections.
● Encrypt sensitive files such as tax records stored on the computer.
● Use strong passwords.
● Learn to recognize and avoid phishing emails, threatening phone calls and texts from thieves posing as legitimate organizations such as banks, credit card companies and government organizations, including the IRS.
● Do not click on links or download attachments from unknown or suspicious emails.
● Protect personal data. Don’t routinely carry a Social Security card, and make sure tax records are secure. Treat personal information like cash; don’t leave it lying around.
