Tax time means people are looking to pay and receive money and that means other people are eager to intercept the funds. Online filing has become a very big business in the United States. The lure of a faster tax return is a compelling inducement for many people.

What is the appeal of a faster tax return? At its most basic level is immediate gratification. When an action can be reduced to “immediate gratification” sit up and take notice. This is when, seemingly by nature, we make ourselves most vulnerable to deception. There are other risks associated with online filing beyond falling for standard scams, and even those who file using the traditional methods are at risk.

Front and center on the IRS web site is a link to an article entitled “Warning on Identity Theft Scams” and is well worth reading as a defensive measure. The more we know about these threats the less effective the bad guys will be.

Online Filing Risks

When filing taxes online a person’s name, spouse’s name (if married) address, social security number, financial information, and date of filing are all revealed. In the wrong hands this information can be used to create a very convincing correspondence designed to gain the victim’s trust and trick them into taking actions that will net the attacker money.

There are two significant attacks online filers need to be aware of. One risk comes from using public computers and the other from compromised personal computers.

There are terrific uses for computers in libraries, hotel business centers, and Internet kiosks... filing taxes is not one of them. Computers made available for public use must be assumed to be monitoring every keystroke that is made. This doesn’t mean the library or hotel is monitoring your work, but rather the computers are exposed and can be “hijacked” by others who use the computers. In many cases it is trivial to place a program on a public computer that will log all keystrokes and websites visited and then relay that information to a remote location.

Filing online using legitimate software programs from well known companies is also not without its risks. If your home computer has been compromised –(i.e. infected) then you face the same risks encountered with public computers. Computers that are used for file sharing, downloading “adult content”, and free software are at a much higher risk of being compromised. The free smiles and screensavers, “adult” web sites, and file sharing programs have a disproportionately high amount of malicious programs that can silently install and then monitor, or even give remote control of the computer to a remote attacker.

Anti-virus, anti-spyware, and anti-adware software can help protect your computer, but no security software is 100%. If you have a shared computer, such as one that several family members use, it might be better to use a professional tax service to safely expedite your tax return. At the very least, make sure your antivirus software is up-to-date and functioning. You may wish to get a second opinion. Installing multiple antivirus solutions on a single computer is always a bad idea, however many legitimate anti-virus companies have online scanners that can be safely used. If you are using one of the better known solutions for your anti-virus protection, then a quick visit to the free ESET online scanner at http://www.eset.com/onlinescan is a sensible approach to obtaining a “second opinion” from a high quality security product.

Tax Preparation

If a person decides to have their taxes prepared professionally then it makes sense to verify the preparer is both qualified and legitimate. As a rule of thumb, a spammer is not a good resource for assistance in preparing your taxes. If you receive an email based offer for the “fastest tax return”, or other similar claim designed to induce you to use a tax preparer you know nothing about, then the odds are you’ll know nothing about your return either. If you know people who have had their taxes prepared by a professional in the past and are happy with the service, it can be a useful reference. If you’re considering using a company specializing in tax preparation, check your local Better Business Bureau to see if there are unresolved complaints.

Identity Theft and Tax Return Scams

There is no end to the creativity of criminals after your money. There are a variety of “attacks” security professionals see and hear about on a daily basis. The computer is not the only avenue of attack.

One scam involves a telephone call claiming the victim is owed a tax rebate. Just remember the IRS is not going to call and ask for your bank account information, social security number, or any other information. Another telephone ploy involves the IRS calling to verify account information because you have not cashed a check. The IRS doesn’t care if you cash your check. What you do with your refund is of no concern to the IRS.

I got the most fantastic email! The IRS has money for me! NOT!!! The IRS does not send unsolicited emails to tax payers. If you received an email that was not directly in response to a request for information, it did not come from the IRS.

What a bummer, I just found out through email that I am being audited. The IRS does not send email to tell you that you are being audited. The audit email is a scam designed to collect personal information from people in order to later perform identity theft. The audit ruse uses fear to trick people into yielding information they may not have been willing to divulge in an unpanicked state.

Protecting Yourself

The truth is there is no way to predict what the next attack will involve, so nobody can warn you of each unique attempt to steal your money and your identity. In all cases there are attributes of the attacks that can be learned. In almost all cases the attack begins with an unsolicited email or telephone call. In addition, the attacks solicit personal information like bank accounts, credit card numbers, and social security or tax identification numbers.

These are not methods the IRS employs. The IRS has an email address that can be used to inquire about suspicious emails. If you receive a phone call from the IRS without initiating the communication it is a fraud.

The IRS maintains an article titled, “How to Protect Yourself from Suspicious E-Mails or Phishing Schemes.” This is well worth the read and worth sharing with others.

One of the sagest pieces of advice I ever received was “Knowledge is power – if you share it”. The power to stymie the onslaught of identity theft attacks is through the sharing of knowledge. It is time to be a more powerful advocate in the fight against identity theft.

Tax season is an excellent time to redouble the efforts.


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