April 15 may be more than a month away, but tax identity thieves and imposters are ready for tax season whether you are or not. The Federal Trade Commission (FTC), Internal Revenue Service (IRS), and email security companies are warning everyone that this year’s tax season has a different look thanks to the coronavirus pandemic.
What to be on the lookout for in emails
At the top of everyone’s watch list are emails relating to anything and everything that deals with taxes: especially deadline extensions and any emails that specifically address the COVID-19 pandemic.
Tim Sadler, CEO and co-founder of email security company Tessian, told ConsumerAffairs that there are five things worth remembering when looking at a tax-related email:
Check the sender: Do the names and email addresses match up? Does the name and email address look believable?
“Attackers will frequently take advantage of the fact that mobile email only shows a display name – as opposed to the full email address – and will change the display name to someone that the victim is familiar with,” Sadler said.
Don't open attachments: Tax season or not, email attachments are a scammer’s go-to weapon of choice. They often use them to infect a victim’s device with malware or code that allows them to gain unauthorized access to your computer. Sadler suggests taking this cautionary step even further.
“Be wary of even opening emails that are unfamiliar let alone attachments. Attackers have started using social engineering techniques such as hiding keywords in raw HTML or sending invisible pixels. From there, bad actors can lure someone into entering their credentials online and then steal sensitive identity information or wire money to fraudulent accounts,” he said.
Check for errors and tone: Spelling mistakes and poor grammar are always red flags and not something the IRS would likely ever let out of the building. A poorly constructed email or graphic can be one of the easiest ways to spot fraud.
Don't rush into anything: Sadler adds that on top of those warning signs, taxpayers should be wary of any unusual or unprofessional sense of urgency in the email. “If you're unsure, you can verify the legitimacy of the sender by calling the organization directly,” he offered.
The executive also gave some sage advice that can help verify the authenticity of an email sender. He said you can search for the sending domain in your inbox -- e.g., “@irs.gov.” If you’ve received legitimate emails from the sender over the past few years, it’s generally a good sign that the new email is a legitimate request.
Be skeptical: Ask yourself what are the chances that the sender of a particular email would send you a message about a particular subject -- in this case, taxes.
“If not, question whether the sender is legitimate. If there is a URL within the email, hover over the link but don’t click. If the URL domain doesn’t match the sending domain, this could be a sign of a scam,” Sadler suggested.
IRS imposters are looking for victims
The FTC reminds Americans that “government” imposters are good at their game -- very good. They might call you on the phone pretending to be from the IRS or even show up on your doorstep claiming you owe taxes and demand that you pay them right then and there.
The agency reminds citizens that the key element of those payment demands are usually gift cards or prepaid debit cards. To help everyone understand the particulars of this scam, the FTC has produced a video explaining how it works.
“They threaten you’ll be arrested or face other bad consequences if you don’t pay. But it’s all a lie. If you send the money, it’s gone,” the agency warned.
Beware of identity theft
In addition to curious emails, the FTC warns taxpayers that scammers are also trying to find ways to steal a person’s tax identity. Here’s the agency’s to-do list on that subject:
Protect your Social Security number (SSN): Whether it’s tax season or the December holidays, the FTC says that you should never give out your SSN unless there’s a) a good reason and, b) you’re absolutely sure who it is you’re giving it to.
File early: When it comes to being scammed, procrastination is not your friend.
“Once you file your tax return, you limit the opportunity for someone else to have stolen your identity and do it. It’s like the perfect storm we’re dealing with right now,” Howard Silverstone, a forensic accountant and a member of the American Institute of Certified Public Accountants’ fraud task force, told CNBC.
Mail your return directly from the post office: The FTC says those who mail their tax return directly from the post office are limiting the chances that their return will be snatched by someone who can steal and reuse personal information.
Research a tax preparer thoroughly: Before handing over personal information to anyone the first time, do your homework.
“Most tax return preparers provide outstanding and professional tax service. However, each year, some taxpayers are hurt financially because they choose the wrong tax return preparer,” the IRS suggests. The agency offers a list of things to consider when choosing a tax preparer and how to avoid unethical "ghost" return preparers.
Check your credit report
While it doesn’t directly relate to tax returns, the FTC says there’s one extra step everyone can take to ensure that their identity hasn’t been stolen or an account hasn’t been opened in their name by someone else -- a credit report.
Normally, U.S. citizens can get a free credit report from each of the three credit reporting agencies, but online reports are being offered every single week through April, 2021 by Equifax, Experian, and TransUnion because of the COVID-19 pandemic.