IRS Alert: Agency Warns of Tax Scams This Holiday Season, Here’s How to Protect Yourself

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The combination of the holiday shopping season, the upcoming tax season and the pandemic creates additional opportunities for criminals to steal sensitive personal or financial information. Now, the Internal Revenue Service (IRS) is warning taxpayers to beware of a dangerous combination of events that can increase their exposure to tax scams or identity theft, according to a release.

See: Don’t Fall For One of the ‘Dirty Dozen’ Tax Scams
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People should take extra care while shopping online or viewing emails and texts, the IRS detailed.

“Don’t let this be the most wonderful time of the year for identity thieves,” IRS Commissioner Chuck Rettig said in the release. “The approach of the holidays and tax season increases risk for taxpayers and opportunities for criminals. We urge people to be extra careful with their personal and financial information during this period while shopping online or getting suspicious emails or text. Taking a few simple steps can keep people from becoming victims of identity theft and protect their sensitive personal information needed for tax returns and refunds.”

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Protect Yourself From Tax Scams, Identity Theft

Tom Wheelwright, CEO of WealthAbility, told GOBankingRates that to avoid tax identity theft, consumers should do a few things: never respond to an email from someone claiming to be from the IRS, and never respond to a phone call from someone claiming to be from the IRS. Further, if you are in doubt as to whether or not a letter is truly from the IRS, have your tax professional call the IRS to find out what’s going on.

In addition, Wheelwright said that consumers should never send social security or other taxpayer identification numbers through the email, or an attachment to an email. “Your tax preparer should have a secure portal you can use to upload all of the information they need from you,” he said. “If you are a victim of identity theft of any kind, notify your tax professional immediately so they can help you take the appropriate steps with the IRS.”

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The IRS added that they were adding special emphasis on tax scam or fraud education concerning younger and older Americans via their 6th annual National Tax Security Awareness Week. The statement made it clear that even if someone doesn’t file a tax return, their online interactions can lead to scam artists obtaining sensitive information.

See: 7 Ways You’re Accidentally Committing Tax Fraud
Find: Social Security Scams: 3 Common Requests and How To Report Them

The IRS statement recommends several steps consumers can take to protect themselves:

  • Use security software for computers, tablets and mobile phones — and keep it updated. Protect electronic devices of family members, especially teens and young children.
  • Make sure anti-virus software for computers has a feature to stop malware, and that there is a firewall enabled that can prevent intrusions.
  • Phishing scams — like imposter emails, calls and texts — are the No. 1 way thieves steal personal data. Don’t open links or attachments on suspicious emails. This year, fraud scams related to COVID-19, Economic Impact Payments and other tax law changes are common.
  • Use strong and unique passwords for online accounts. Use a phrase or series of words that can be easily remembered or use a password manager.
  • Don’t shop on unsecured public Wi-Fi in places like a mall. Remember, thieves can eavesdrop.
  • Back up files on computers and mobile phones. A cloud service or an external hard drive can be used to copy information from computers or phones — providing an important place to recover financial or tax data.
  • Those working from home should consider creating a virtual private network (VPN) to securely connect to their workplace.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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