Tax scams are rampant today, robbing consumers of billions of dollars every year.
In fact, the Internal Revenue Service reported a 400 percent increase in tax scams during the 2016 filing season. That number could grow even larger in 2017.
Why Are Tax Scams So Common Today?
The internet and advances in technology have created a welcoming environment for hackers and thieves. However, the success of tax scams has less to do with technology than you might think.
In fact, most consumers who fall victim to these scams and related tactics willingly give their personal information — and their money — to scammers.
Many of us tend to be too trusting for our own good, but when you add the panic that uttering “IRS” causes, it’s easy to see how so many scammers are still in business.
Some fraudulent tax preparers and electronic filing sites promise huge refunds, but instead steal your personal information for criminal use.
The Most Common 2017 Tax Scams
Again this year, email, phishing and malware are predicted to be tax scammers’ preferred tactics.
Criminals use the IRS logo to create official-looking emails requesting personal information. Once you click the link or open the attachment provided in the phishing email, you allow the hackers access to your computer and all the personal information it contains.
It may also allow them to install malicious computer code known as malware. Once malware is installed on your computer, hackers can record your keystrokes to obtain passwords and other sensitive data.
Text and instant messaging apps are other favored vehicles. These attacks typically direct you to a website link where you will be asked to update your personal information. Most of these sites look legitimate, and you may not realize you’ve been fooled until much later. But the overwhelming favorite of tax scammers is the generic telephone call. An official-sounding caller identifies him or herself as being with the IRS, the Taxpayer Advocacy Panel (TAP) or a similar agency. They may advise you that you’re seriously past due on a tax bill and threaten you with jail. And then they will request personal information, payment by credit card or by prepaid cards.