Here comes the tax season. As the taxpayers, as well as professionals, are busy in calculations and preparations, the scammers are also expected to be on their toes, trying to leverage any loophole in the tax paying process or silly mistakes committed by the individuals.
The IRS tries its best every year to prevent any tax-related scams and ensure a reliable tax process. However, it is also the responsibility of the individuals to take some precautions and be attentive, especially during the tax season.
To help the people identify various risks and prevent them, the IRS conducted a National Tax Security Awareness Week from December 3-7 offering valuable information and tips on various topics such as data thefts, identity theft, W-2 scams, password guidance, account protection, among others.
According to the IRS commissioner Chuck Rettig “The holidays and tax season present great opportunities for scam artists to try stealing valuable information through fake emails. Watch your inbox for these sophisticated schemes that try to fool you into thinking they’re from the IRS or our partners in the tax community. Taking a few simple steps can protect yourself during the holiday season and at tax time.”
According to IRS, the email scams saw a 60 percent rise in 2018 (from 1200 in 2017 to about 2000 in 2018) with the scammers trying new methods to lure the individuals into providing their personal information. The tax scams can be diverse in the way it is designed to extract critical tax information.
Some scams operate by posing as an email from the IRS urging you to hand out personal and financial information while others request you to open an attachment or link containing a malware, resulting in your system getting hacked.
As a taxpayer, you must always remember that:
- The IRS never calls or emails you regarding the payment of your taxes
- The IRS never threatens to call the cops if you have not paid the taxes
- Ask for any payment information such as credit or debit card numbers
- Ask you to pay from a specific payment method
Here are some email scams that the IRS wants you to look out for in the 2019 tax season.
Table of Contents
1. Tax Transcript Scam
The Tax Transcript Scam sends an email to the individuals pretending to be from the IRS requesting them to open a document. The document or attachment is labeled as “Tax Accounting Transcript.” It contains a malware that takes complete control over your system and data.
The email is pretended to be sent from “IRS Online,” and the subject is “Tax Account Transcript” with some changes. The malware is identified as Emotet, which is also used commonly to attack financial and banking institutions.
The IRS clearly mentions that it does not send any critical data by email. Hence, the individuals should refrain from opening such emails and notify the IRS immediately by forwarding the mail at firstname.lastname@example.org.
2. W-2 Scams and Identity Theft
As you may know, it is the responsibility of the employer to fill the W-2 form and send it to the employee as well as the IRS. The W-2 form holds critical information such as the annual wages and the tax amount to be paid.
The scammers are aiming the HR and payroll department using methods to extract the sensitive W-2 information. The information can then be used to claim tax refunds or file false tax returns. For instance, Information such as Employee Identification Number (EIN) can be used to create false W-2 forms. As a result, there is an issue when you try to file taxes as somebody else has already used your identity.
The email that cons the individuals into giving the W-2 information is made to look like an email from the top management executives. Hence, the payroll or human resources department is tricked into giving the information to the scammers.
If you have fallen victim to such a scam, you must take the following steps –
- Notify the IRS by sending an email to email@example.com with the subject line “W2 Data Loss”. You should not attach any data identifying you personally.
- Report information of victims to the states by sending an email to the Federation of Tax Administrators at StateAlert@taxadmin.org.
- All the employees should be informed immediately so they can be prepared for any identity theft.
- The fraud email should be forwarded to firstname.lastname@example.org.
3. Taxpayer Advocacy Panel Email Scam
The Tax Advocacy Panel (TAP) advises the IRS on critical issues faced by the taxpayers. A new type of scam tricks the taxpayers into providing all their financial and personal info by sending an email that appears to be from the Tax Advocacy Panel.
What you have to keep in mind is that IRS does not initiate any emails or phone calls to the tax payers. If you receive such a mail from the “Tax Advocacy Panel,” do not provide any personal information. Just forward the mail to email@example.com.
4. FBI/IRS Ransomware Scam
Under this phishing scam, the cybercriminals use the name of the IRS and FBI in an email to infect your system with ransomware that can extract all the confidential data from your system and paralyze it.
To appear genuine, the fake emblems of both the FBI and IRS are displayed in the email. It urges the taxpayers to complete a questionnaire required by the FBI by clicking on a link. As soon as you click the link, the ransomware is downloaded onto your system.
The IRS recommends you report any ransomware attack to the Internet Crime Complaint Center by visiting www.IC3.gov. You should also forward the email to firstname.lastname@example.org and delete the mail from your inbox.
5. Form W-8BEN scam
The scam requests the taxpayers to fill out fake W-8BEN form and its variations. This is sent by sending an email appearing to be from the IRS and requesting the users to authenticate their information through the form.
The scam targets the non-residential individuals to get their personal information such as passport details. The IRS never asks for any such confidential information and should not be provided in any case whatsoever.
In case you are the victim of such as scam, report it to the IRS by sending a mail with subject “IRS Impersonation Scam” to email@example.com or the Treasury Inspector General for Tax Administration on The IRS Impersonation Scam Reporting website.
Beware of Email Scams This Tax Season
This 2019 tax season, keep yourself prepared for the fraud email and phone calls that you may receive for the sole purpose of scamming you. Here are some of the precautions you must take to prevent being a victim of such scams.
a) Keep Your Eyes Open – Often we are in a hurry to open email and attachments without going through the content thoroughly. Prevent opening any emails and the files attached that appear to be from the IRS.
b) Use cloud service for data storage – You can opt for cloud hosting services this tax season for the storage of your tax data. The cloud providers ensure a secure environment and the data is safe even if your local system gets hacked.
c) Keep Strong Password – A strong password is a combination of letters, number, and symbols. Keep a password that is 8-16 characters long and does not relate to your personal information such as date of birth for all your accounts.
d) Update Your Anti-Virus – Most users have an outdated version of anti-virus on their systems or no anti-virus at all. Do not make this mistake. The latest anti-virus software available in the market can identify ransomware and prevent it from infecting your system.
e) Use Multi-factor Authentication – Try to use multi-factor authentication for your email accounts. It ensures that the hacker is not able to login to your account even if he/she has your password.
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Emily4 years ago
Nice post Sharad!
Karen4 years ago
I started my accounting profession a couple of years ago and have achieved some early milestones, but the one thing I struggle with is email scams.