As tax season approaches we need to pay attention to some recent tax cyber scams and how to avoid them. Tax season is upon us, and while many individuals and businesses diligently prepare their returns, cybercriminals are lurking, ready to exploit vulnerabilities and steal sensitive information. In recent years, tax-related cyber scams have become increasingly sophisticated, posing significant risks to taxpayers and organizations alike.
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SCAM OF THE WEEK
An Early Tax Reminder From the IRS
The US Internal Revenue Service (IRS) recently held its eighth annual Security Summit. The IRS concluded the summit by reminding taxpayers and tax professionals to stay alert during the upcoming tax season. Specifically, they warned against phishing and smishing scams. These tax scams aren’t limited to the US; cybercriminals all over the world are preparing their phishing emails and text messages (smishing). As handling taxes is often a complicated task, bad actors use this sensitive topic to catch people’s attention or manipulate their emotions.
To stay safe during tax season, follow the tips below:
- Know what to expect from your local revenue agency. For instance, in the US, the IRS usually contacts taxpayers by mail, not email or text.
- Always think before clicking. Cyberattacks are designed to catch people off guard and trick them into clicking impulsively.
- Use extra caution when handling tax documents. For digital documents, use password protection. For physical documents, keep paperwork in a secure location and shred anything that is no longer needed.
Safeguard Your Finances: A Guide to Recognizing and Avoiding Tax Cyber Scams
1. Phishing Emails and Websites:
Phishing remains one of the most prevalent tactics used by cybercriminals to trick unsuspecting individuals into divulging personal and financial information. Recent tax cyber scams and how to avoid them – In tax-related scams, fraudsters often impersonate government agencies, tax preparation services, or financial institutions, sending deceptive emails or creating fake websites that mimic legitimate entities.
How to Avoid:
- Be cautious of unsolicited emails: Verify the sender’s email address and avoid clicking on links or downloading attachments from unknown sources.
- Verify the legitimacy of websites: Always double-check the URL of websites requesting sensitive information and ensure they use secure HTTPS connections.
2. Fake IRS Calls:
Scammers posing as representatives from the Internal Revenue Service (IRS) make intimidating phone calls, threatening individuals with legal action or arrest for alleged tax violations. Recent tax cyber scams and how to avoid them – These calls often demand immediate payment or sensitive information to resolve the purported issue.
How to Avoid:
- Know the IRS communication protocols: The IRS typically initiates contact through mail, not phone calls, for tax-related matters.
- Never share personal information over the phone: Be wary of unsolicited calls demanding payment or sensitive data, and hang up if you suspect a scam.
3. Tax-Related Identity Theft:
Identity theft occurs when fraudsters use stolen personal information to file fraudulent tax returns or claim refunds on behalf of unsuspecting victims. Recent tax cyber scams and how to avoid them – This can result in delayed refunds, financial losses, and significant hassle for affected individuals.
How to Avoid:
- Protect sensitive information: Safeguard personal and financial data by using secure passwords, encrypting sensitive files, and avoiding sharing sensitive information online or over the phone.
- Monitor financial accounts: Regularly review bank statements, credit reports, and tax filings for any suspicious activity or unauthorized transactions.
4. Fraudulent Tax Preparers:
Some unethical tax preparers exploit their positions of trust to commit fraud, including inflating deductions, fabricating expenses, or diverting refunds to their own accounts. Recent tax cyber scams and how to avoid them – Entrusting sensitive financial information to dishonest preparers can have serious consequences for taxpayers.
How to Avoid:
- Choose reputable tax professionals: Research tax preparers thoroughly, verify their credentials, and seek recommendations from trusted sources.
- Review tax returns before filing: Carefully review all details and ensure accuracy before signing and submitting tax returns.
5. Ransomware Attacks:
Ransomware attacks involve malicious software that encrypts files or systems, rendering them inaccessible until a ransom is paid. Recent tax cyber scams and how to avoid them – In tax-related scams, cybercriminals may target accounting firms, tax software providers, or individuals, encrypting sensitive tax data and demanding payment for decryption.
How to Avoid:
- Implement robust cybersecurity measures: Install reputable antivirus software, keep systems and software updated, and regularly back up critical data to secure, offline locations.
- Exercise caution with email attachments and downloads: Avoid opening attachments or clicking on links from unknown or suspicious sources, as they may contain ransomware payloads.
Recent tax cyber scams and how to avoid them
Conclusion:
As tax season unfolds, it’s crucial to remain vigilant and proactive in safeguarding against tax cyber scams. By staying informed about common tactics used by cybercriminals and adopting proactive security measures, individuals and organizations can mitigate the risks associated with tax-related fraud and protect their sensitive information from falling into the wrong hands. Remember, when it comes to taxes and cybersecurity, vigilance is key to staying one step ahead of cyber threats.
