Tax Scam Protection For Your 2023 Tax Return

With the new year underway, millions of taxpayers are preparing for tax season. Simultaneously, cybercriminals and IRS impersonators are gearing up for tax return crimes that take your tax returns. From anticipated tax return loan scams, tax fraud, identity theft, and everything in between, bad actors wait for tax return season every year. Common tactics include cyber crimes like identity theft and email phishing for personal information. 

You can prevent tax return crime by slowing down and thinking clearly about your taxes. Then hire a professional tax preparer, a local CPA, to prepare your taxes and submit your return. We’ve also got the IRS’s Dirty Dozen, a yearly bulletin that dives into current cybercrime threats.

Learn to Spot Impersonators

Tax season motivates IRS impersonators who use intimidation tactics to manipulate taxpayers into taking action. Why? Because the IRS is a federal agency that most people avoid at all costs. They have power that scares people. IRS impersonation scams usually come in two types: verification requests and tax collection. 

If you get a phone call, email, or text message asking you to verify your personal information, it’s a scam. Mail is the only way the IRS contacts people. While IRS agent impersonation is commonplace, others emerge during tax season, so be vigilant and never give out your information on the phone.

What the IRS Does and Doesn’t Do

Phone call scams are common and operate all year long. The mention of the IRS raises blood pressure. The caller has a threat like “pay your back taxes now or risk jail time.” The IRS never calls, and they never threaten. They don’t need to because they ARE threatening enough as a government agent. 

A note about identity theft and its connection to tax fraud

Unfortunately, if you’ve tried to file your taxes and discovered your Social Security number already used in a different tax return, you’ve probably been a victim of identity theft. Likewise, your identifying information is compromised if you get a 5071C letter stating your tax ID’s connection to your employment doesn’t match IRS records. Because Social Security numbers tie directly to paying taxes, the IRS needs verification. 

Become a Cybersecurity Ninja

Tax scams only work because victims either forget essential cybersecurity or don’t know about keeping safe online. Either case is troubling because our online lives are increasingly relevant to our physical identities. Think about your cybersecurity like a ninja watching in the shadows for enemies, ready to pounce when someone approaches.

Consequently, following basic security protocols protects against tax fraud and puts you in the ninja mindset. We’ve all heard these protocols before, but it’s worth mentioning them again:

• Use secure passwords, not birthdays or other numbers connected to your physical life. It’s a good idea to get used to using special characters in all your passwords, even those password requests that don’t ask for them. 
• Never leave windows and tabs open from a web page, especially a secure site. Log in at work without logging out or using a credit card without closing the window. Most secure websites log you out once you close the tab.
• Don’t open links in email messages. Even friendly emails can have secret links that take you to places where cybercriminals steal from you. In fact, a common IRS scam involves clicking a link in an official IRS email message. This is always a phishing scam because the IRS doesn’t use email messages to collect personal information. In fact, they never call people or send text messages.

Cybersecurity ninjas know these basic online security protocols and can apply them to everything they do online. Hiring a local CPA like Peter B Scala for your tax return preparation is even better.

Resist the Urge For Quick Cash

Millions of taxpayers use the previous year’s tax payments to apply for credits and deductions that boost return amounts. This is a yearly thing, so families rely on tax refunds like they are extra income. Unfortunately, this “sure thing” brings out people who want part of that refund in the form of interest paid on tax return advance loans. Get part now and pay us back later with no interest.

There are legitimate reasons for taking out this type of loan. However, you pay a fee when the return comes in. Sometimes waiting a few extra days saves money, but if you need this type of loan, talk to a CPA first to get all your options. Phishing and other nefarious actions increase during tax season, which is a cause for slowing things down and extra vigilance. Sadly, cybercriminals use people’s need for quick cash to steal money, so scams surrounding return advance loans run rampant during tax season. 

If you must take out a refund anticipation loan, use a reputable tax preparer. Even companies who claim zero loan fees must make money somehow, or the services wouldn’t be available. These companies do this because they know how much you get and just take the cost out of the refund before giving it to you. Make sure you know everything about the loan before you sign the documents.

Think Cyber Safety, Stay Local

The best way to avoid tax scams is to hire a professional tax preparer. Sure, you can do what the commercials tell you. But is this personal enough for your situation? Given the complexity of our delivery-oriented service economy, people need to be careful about doing taxes online. Stay safe. Hire a local CPA to do your taxes because they know about current tax scams and how to avoid them.