The start of each new year typically brings renewed resolve to get healthy, strengthened desires for personal improvement, and of course, the fast-approaching tax season.
Tax season can mean a lot of things to a lot of people. For some, it brings excitement as they look forward to a large refund; for others, it means one more thing to tack onto their to-do list, which only adds to their stress burden. And for the fraudsters out there, it means the annual opportunity to rake in fraudulent refunds has finally arrived.
During tax season, our identity theft resolution center sees an enormous uptick in call volume – a trend that seems to only be growing. We saw tax fraud more than double from 2014 to 2015; the increase was so drastic that we had to start categorizing it as a separate case type from the “government document fraud” category, which it was previously included in. In 2015, tax fraud was the biggest type of identity fraud we encountered, accounting for 22% of the nearly 3,000 cases we had data available for.
Tax scammers are ruthless: they’re unaffected by the thought of a family dependent upon what is likely their biggest check of the year being denied this financial relief. Let’s take a look at one of our own cases as an example, in which an entire family’s information was stolen. The husband and wife didn’t find out until they both attempted to file and were told their refund had already been issued. Further, whoever filed even listed their two children as dependents! It’s scary to think that somebody had all of this information about them at their fingertips – when they knew absolutely nothing about them. In the end, the couple had to wait eight months to get the well-earned refund they deserved – and that was with the dedicated assistance of our specialists that are experts in resolution.
If there’s one thing we can be sure of, it’s that there will be scams this tax season. Fortunately, there are safeguards you can provide to your clients to help prepare their employees for the impending tax season:
- Go ahead and schedule time with your tax preparer now so you can get your taxes done as early as possible. This will help decrease the chances that a fraudster will get your refund before you do.
- Sign up for Scam Alerts from the FTC to stay abreast of all the dirty tricks scammers are currently using.
- Talk to someone in your HR department to see if you can get your W-2 before it’s mailed out. This will help ensure that you actually receive it so you don’t have to risk it being lost or stolen in the mail.
- Never send emails with personally identifiable information (PII) attached. It’s best to never send them through email at all, but if you must, you can encrypt your message by making a change in your email’s security settings.
- Beware of computer scams. These can come via email or as popups on your computer asking for your personal information. The IRS saw an approximate 400% surge in phishing and malware incidents in the 2016 tax season. Our resolution center has dealt with hundreds of these cases, but they’re easy to avoid, especially with our proprietary Online Data Protection suite, which includes anti-phishing and anti-keylogging software.
- Always use a professional, trustworthy tax preparer. Sometimes, even national tax preparation chains can scam you out of money or use less-than-secure procedures when it comes to handling your personal information. Make sure you use someone you trust.
- Never provide any personal information over the phone to someone who says they are from the IRS. The IRS will never contact you via phone, email, or social media. Listen to an IRS scam phone call one of our employees received.
Tax season is demanding enough as it is for employees; worrying about tax fraud shouldn’t have to be a part of it. One of the best ways for you to help your clients’ employees mitigate risk and keep them focused during tax season is to offer a comprehensive identity protection service like Iris. To learn more about Iris Identity Protection for employers or employee benefits brokers, request a demo today.