Beware of Phishing Scams

October 25, 2019

Back in the first half of 2018, the IRS identified a dozen tax scams which taxpayers should be aware before filing taxes for the next year. The IRS referred to this list as the “dirty dozen” tax scams. In the 2018 dirty dozen tax scam list, the IRS identified a new variation of the familiar “phishing scam” used by tax scammers. The IRS describes an elaborate scheme involving the use of taxpayer bank account numbers for fraudulent refund deposits and subsequent withdrawals. In this post, we will go over the basics of the mechanics of this scam and then provide tips on how taxpayers can avoid this scam. We will also discuss one other email scam mentioned in the 2018 dirty dozen list.

Phishing Scams & Tax Returns

Every year, many unsuspecting taxpayers become victims of one tax scam or another. This is because those taxpayers weren’t aware of what was going on. Few people in the population have their guard up when it comes to filing their taxes. But that needs to change. In the future, we will continue to feature posts on tax scams and provide information so that readers can avoid becoming a victim to these scams.

New Phishing Scam Variation

One of the latest phishing scam variation identified by the IRS back in 2018 involves using the victim’s own bank account number. In this elaborate scheme, the tax scammer steals a taxpayer’s personal information from a tax professional (or a similar source) and the scammer files a fraudulent tax return. The tax scammers then channel the tax refund to the victim’s bank account via direct deposit. From that point, various avenues are used to deceive the victim into transmitting this false refund money to the scammer. For instance, these scammers often call the victim and claim to be representatives of the IRS or a collection agency. The reason why this is often successful is because the victim believes that the refund was mistakenly deposited, rather than deposited due to fraud.

How to Avoid Phishing Scams

Although this new phishing scam is pretty elaborate, there’s no reason why any taxpayer has to fall victim to this or similar phishing attacks. The first step to preventing this kind of abuse is to always store your personal information with a trusted source. This new phishing scheme is perpetrated using a taxpayer’s sensitive information; you need to ensure that there’s no risk that your information can be stolen by would-be criminals. In addition, you need to educate yourself about the kind of behavior engaged in by legitimate IRS representatives. The IRS will almost never directly contact a taxpayer to request the return of a mistakenly processed refund. What’s more, there are steps you can take to ensure that the supposed IRS agent you’re communicating with is truly an IRS agent and not a scammer. You can ask for agent identification information and other information to verify the agent.

Aggressive Email Scams

The IRS also identified a new wave of phishing email scams in 2018. The IRS noted that the scammers tended to target tax professionals, human resources professionals, payroll professionals, individual taxpayers and others. The scam works when scammers pose as one of various financial or government organization. They then extract private data, or money. The scammers seek information such as username and password, or social security numbers, which can be used for identity theft. In some cases, the scammers directly request money.

Social Media & Websites

Scammers often go to great lengths to try and substantiate their false claims and representations. For instance, scammers often establish social media accounts, and legitimate-looking websites, in order to boost evidence of their “credentials”. Again, as with the previous scam, the best way to protect yourself is to stay educated and alert. To prevent identity theft, you need to guard your private information very carefully. Never entrust it to anyone with whom you don’t have full confidence.

We’ll Continue to Track Phishing Scams

As mentioned, we’ll continue to highlight some of these tax scams. That way, our readers can steer clear of these kinds of schemes. Every year, tax scammers and financial criminals develop new and more conniving ways to extract money from gullible taxpayers. Part of our mission here is to educate our readers so that they’re not gullible. At Mackay, Caswell & Callahan, P.C., we see this task as intimately associated with our other tax related services. These include tax debt resolution, state tax debt resolution, and sales tax debt resolution. These are really two parts of a bigger goal.

Contact MC&C Today for More Information

At MC&C, our overarching goal is to assist our clients. That way, they can resolve their financial obligations and rebuild their fiscal lives. Preventing forms of financial abuse is clearly associated with this goal. Tune in later for more in-depth articles on tax scams. And, in the meantime, get in touch with one of our New York City tax attorneys if you need assistance.

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