5 Tips To Avoid Tax Fraud

April 14, 2014 12:00 pm0 comments

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Don’t Get Scammed Out Of Your Refund

The tax deadline, April 15, is tomorrow. As last minute tax filers are preoccupied with filing their returns and gathering their documentation, cybercriminals will be lurking online, unleashing clever phishing scams and trying to steal personal data.

Just last week, the Internal Revenue Service (IRS) issued an official warning on hackers masquerading as the Taxpayer Advocate Service through fake emails. The IRS also noted that it had started more than 200 new investigations this filing season, focused on identity theft and tax refund fraud schemes. US Attorney General Eric Holder also issued a warning about the growing number of criminals looking for taxpayers to dupe.

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According to a recent IRS press release, in Fiscal Year (FY) 2013, the IRS initiated approximately 1,492 identity theft related criminal investigations, an increase of 66% over investigations initiated in FY 2012. IRS Criminal Investigation has started 295 new identity theft investigations since January, pushing the number of active cases to more than 1,800.

As you work on your last minute taxes, keep these tips in mind to avoid becoming a victim of tax fraud.

1. Beware of Social Engineering

With the rise in online attacks this tax season, it’s important to proceed with caution when sharing sensitive banking or financial information with others. If you receive emails or calls from someone claiming to represent the IRS, do not share your social security number or bank account details until you can verify their identity.

2. Think Twice Before Opening Email Attachments

Did you know that 1 in every 25 email attachments are malicious?

Scammers will pretend to be IRS agents, noting problems with taxpayer returns or issues with refunds, via emails that may include attachments that contain malware.

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It’s tough to tell which files are legitimate and malware-free. Using an antivirus and antimalware software to check email attachments and web downloads will reduce the risk of compromising your computer.

3. Avoid Using Public WiFi

Make sure to use a private WiFi network when submitting your tax return. While public WiFi hotspots are convenient, you could become the target of a man-in-the-middle attack, putting your personal information at risk.

4. Protect Your Data with Strong Passwords

While preparing your tax return for electronic filing, remember to use a strong password to protect the data file.

After filing your return, save the documents to a CD or flash drive, store it in a safe place, and delete the file from your hard drive. If you have an accountant, ask about the safety measures being taken to ensure your data doesn’t fall into the wrong hands.

5. Keep Your Antivirus and Two-way Firewall Up-To-Date

It’s very important to ensure your antivirus and firewall are up-to-date during tax season since cybercriminals will be on the lookout for any entry points in your system to access your personal data. Make sure you have a two-way firewall, which stops unwanted inbound traffic and stops spyware and adware from transmitting your personal data out to the internet. You’ll want an antivirus application that has a high detection rate and is capable of identifying threats that surface between updates.

If you think you may have fallen victim to the tax fraudsters and their schemes, report it immediately to the IRS.

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Image: iStockphoto 

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