When it comes to scammers, tax season is the most popular time for them. Today, these scams are more dangerous than ever. What was once a phishing email or call has now turned into an elaborate cyberattack using stolen personal data to trick even the most cautious users.
From fake IRS agents to fraudulent refund deposits, modern scammers are using your personal data against you, and it’s working.
The Shift in Scam Tactics
Understanding how these scams operate and how to protect yourself against those scams is more important than ever, so let’s dive in. Tax scams are not what they used to be.
Back in time, scams relied just on scare tactics; a quick phone call threatening that you owe the IRS money for example. While some of these scare tactics still go around, modern cybercriminals have upgraded their tools and found new ways to steal information.
These days, highly specific stolen data like your Social Security number, full name, address, salary, and even work history is often used by hackers. This allows them to create authentic-feeling emails, calls, or messages. They can even submit false tax returns before you do, redirecting your refund to their own accounts in some cases.
So what changed over the years that lead to this? Easy access to leaked or sold personal data online. Think of it like this, a huge market of data, and tax scammers are the most active buyers.
The Role of Personal Data
The truth is that the stolen personal data is the fuel behind these modern scams, and here is how:
- Social Security Numbers (SSN): With an SSN, scammers can file tax returns, claim refunds, or even create false identities
- Home Addresses and Date of Birth: This information is usually used to pass verification checks and make scam messages seem more legitimate
- Employment and Income Info: If scammers know these details about you, they can easily falsify important documents like W-2s
- Bank or Financial Details: Without question, this data is most sensitive. It can be used to redirect refunds or to trick you into verifying your info
This type of information usually comes from data broker websites or is bought from dark web marketplaces. Even those who take caution when sharing personal information can still be at risk if it gets collected over time by third parties or becomes involved in a major breach.
Source: Pixabay
Warning Signs & Red Flags
The first step to avoiding scams is being able to recognize them before you fall victim to them. So, let’s take a look at some of the warning signs and red flags you should definitely not avoid.
1. Unexpected Emails or Texts About Refunds or Tax Issues
Keep in mind that the IRS, for example, will never contact you over email, call, or text, and especially not over social media. If you receive any of them under their name, or any other tax company, be sure that it is a scam and that you should report it or ignore it.
2. Fake IRS or Tax Company Websites
Make sure to always double-check URLs. Scammers often use domains that look almost identical to the real ones, with just a minor misspelling, which you can easily miss if you are not paying attention.
3. Pressure to Act Quickly
One of the most common techniques used by scammers is pressuring you to act quickly. This creates a sense of panic and urgency, and the scammer claims you will be fined, arrested, or lose your refund if you don’t act quickly. Don’t fall into this trap; remember that there is no rush when handling your taxes.
4. Requests for Unusual Payments
The IRS will never ask for gift cards, cryptocurrency, or wire transfers as payment. So, if you receive a request for any of these, that is your red flag and sign to not proceed.
5. Incorrect Refund Deposits
If you receive a refund you didn’t file for, it is most likely a scam. Scammers sometimes use your real bank account to deposit fake refunds, then pose as the IRS to demand the money back.
Source: Unsplash
How to Protect Yourself
While the threat is real, you can minimize your risk with just a few smart habits. Here are some practical steps to keep your personal data safe during tax season and in general:
- Practice good data hygiene and regularly check what personal information is available online
- Remove old accounts and unsubscribe from unnecessary services
- Use data removal services if necessary
- File your taxes early
- Use secure cloud storage or encrypted services
- Enable two-factor authentication
- Only use verified and trusted tax professionals
Your tax-planning checklist should include protecting your personal information, whether you’re filing alone or with the help of a professional. Keep an eye out, clean up your digital footprint, and opt out when you can. You can avoid a major headache or possibly financial loss later on by taking a few extra steps today.
