The Rise of Identity Theft and Tax Scams

Ever wonder how to avoid being a victim of identity and tax scams?

Each year, tax scams seem to run more and more rampant, making proper security and privacy protocols critically important. According to the Bureau of Justice statistics, approximately 1 in 18 Americans have their identities stolen each year. With such a consistent rise in identity theft and tax scams, it’s imperative that you keep your information safe and secure from criminals, not only in a work setting but also in your personal life.

The most common form of identity theft is the use of personal information to fraudulently obtain government benefits and tax refunds. There are a variety of ways identities can be stolen, such as by accessing existing financial accounts, creating new accounts with stolen credentials, through internet services and by social impersonation.
 
The consequences of identity theft can be devastating and can cause an array of financial losses. Scammers can gain access to accounts that access money, including bank accounts, retirement accounts, investment accounts and PayPal accounts. This can ultimately affect your credit score, which can take years of hard work to restore. When dealing with credit score damage, getting financing for anything can be virtually impossible. It can affect major purchases (home mortgage, auto loans, college tuition) and lines of credit (home improvement or furniture, clothing or jewelry purchases).
 
Here are some methods often used by scammers:
•    Scare tactics. Sophisticated hoaxers try to scare people into making immediate payments. They may threaten arrest, deport­ation or the revocation of your driver’s license or professional license if you don’t pay. Emails from scammers will often contain a fake IRS document with a phone number or email address to reply to.
•    Caller ID spoofs. Scammers are known to alter caller IDs to make it appear that the IRS is calling. Callers will use IRS titles and fake badge numbers to appear legitimate. They may use online resources to get your personal information to make the call sound official.
•    Fake IRS letterhead. Scam artists will copy official IRS letterhead to use in email or regular mail sent to victims.
 
Keep in mind, the IRS will never:
•    Call you about your tax bill without first sending you a bill in the mail.
•    Demand that you pay taxes and not allow you to question or appeal the amount that you owe.
•    Require that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card or any specific type of tender.
•    Ask for credit or debit card numbers over the phone.
•    Threaten to bring in police or other agencies to arrest you for not paying.
•    Threaten you with a lawsuit.
 
More than anything, it’s important to remember to never give away personal information by phone or email to an untrusted or suspicious source. If you have any questions on how you can protect yourself from identity theft, please let me know.