It's tax season, which means it's also time to be aware of tax scams.
There are three main types of scams people fall victim to:
- Some tax scams occur when fraudulent tax returns are filed in the victim’s name. This scenario occurs when the malicious actor finds or receives information about the tax filer, including the filer’s name, address, date of birth and Social Security Number. The malicious actor then uses this information to file a malicious tax return, citing as many deductions as possible, in order to create as large a tax return as possible. This is identity theft and identity fraud, as well as tax fraud.
- The second variant of tax scams occurs when the malicious actor contacts the victim and tries to convince the victim to do something, such as immediately paying a fine or providing their financial information so a refund can be issued. In these instances the malicious actor uses what they know about the victim, often information gained for a data breach or social networking website, to convince the victim that the caller has access to the victim’s tax information. Frequently during these calls the caller will pretend to be an IRS agent.
- In the third type of tax scam, malicious actors use tax-related spam, phishing emails and fraudulent websites to trick victims into providing login names, passwords or additional information, which can be used in further fraud. Other emails or websites may download malware onto the victim’s computer.
What to watch out for
- Unsolicited phone calls
Don’t be fooled by unsolicited calls. The IRS will never request payment over the phone and will never claim anything is “urgent” or “due immediately.”
- Hostile individuals
If you receive a call from someone claiming to be an IRS representative and they are hostile, insulting or aggressive, or threaten to have you arrested, this is likely a scam.
- Fake Caller IDs
If you’re not sure of the legitimacy of the call, ask for the agent’s name, hang up and call the IRS back using a phone number from their official website.
- Spoofed websites
Watch out for “spoofed” websites that look like the official website but are not. Double check the URL and look for web addresses with https:// which means the website takes extra measures to help secure your information.
If you believe you are the victim of identity theft or identity fraud, there are a few steps you should take:
- File a report with your local police department.
- File a report with your State Attorney General’s Office - http://www.naag.org
- File a report with the Federal Trade Commission (FTC) at www.identitytheft.gov
- File a report with the FBI Internet Crime Complaint Center - http://www.ic3.gov/default.aspx
- File a report with the three major credit bureaus and request a “fraud alert” for your account (e.g. Equifax, Experian and TransUnion)
If you receive spam or a phishing email about your taxes, do not click on the links or open any attachments, instead forward the email to firstname.lastname@example.org. Other tax scams or frauds can be reported through the IRS.
Starion Bank is a full-service financial institution with branches in North Dakota and Wisconsin.