(BPT) - Filing taxes online has made an often-dreaded task easier and more convenient. However, it's important to be aware of heightened cyber security risks during tax season that could lead to identity theft. In 2023, the IRS flagged over a million tax returns for possible identity theft and found a 31% increase in fraudulent returns from the previous year.
With a large majority of taxpayers opting to file electronically, the threat of cybercriminals using your SSN to file and steal your return is real. The experts at LifeLock have pro tips on how to safeguard your identity by learning about common scams and the steps to take to keep your information safe during tax season.
Online criminals that prey on taxpayers seek ways to obtain personal and financial information to steal your identity, file tax returns under your name to steal your refund, or convince you to send them money, gift cards or cryptocurrencies.
While you may not think you're vulnerable to obvious tax and IRS imposter scams, criminals are using convincingly sophisticated tactics. And they love to prey on late filers. So, it's vital to stay alert when it comes to your personal information as the tax deadline approaches.
Watch for these tax scams
Here are four common tactics you may see, and how to avoid falling for them.
1. Phishy IRS schemes
These scams are designed to convince you that a message supposedly from the IRS is legitimate, tricking you into clicking an embedded link in an email or text. These links then lead to fake IRS websites created to record information you input. Or they contact you by phone or text pretending to be from the IRS and rope you into a scam. Some fraudsters will use phishing scams to get your personal information, threaten or trick you into paying a "balance you owe" using gift cards, cryptocurrency or wire transfers.
Pro Tip: The IRS will never contact you via email, text or phone without reaching out by mail first. The IRS does not accept payments via gift cards, cryptocurrency or wire transfers. For concerns about your taxes from this year or any year, go straight to IRS.gov.
If an email looks "phishy," it probably is. You can flag the message as phishing or junk and/or simply delete it. Get a threatening or suspicious phone call supposedly from the IRS? Hang up.
2. Ghost tax prep services
When hiring someone to do your taxes, make sure to use a reputable tax preparation service. A legitimate tax preparer must have a valid Preparer Tax Identification Number (PTIN) and sign your return once complete. Refusing to sign is an indication they could be a ghost tax preparer, only interested in collecting the fee. Another warning sign is requiring a cash payment.
Pro Tip: You can check the credentials of legitimate tax preparers by using the IRS Directory of Federal Tax Return Preparers.
3. Social media scams
Fake tax advice groups and profiles lure people by promising insider tips and bigger refunds, only to phish for sensitive data. These groups often appear legit, and may contact you via direct messages, comments or through seemingly harmless quizzes or surveys. Phishing links disguised as helpful resources or urgent notifications trick users into revealing critical information or downloading malware.
Pro Tip: Privacy settings are your first line of defense against identity theft on social media. These settings control who sees your posts, personal details and even friend lists, which can all be used by cybercriminals. Learn more about staying safe on social media and other tips on LifeLock's blog.
4. Tax identity theft
Scammers can use information like your SSN, birthdate and employer to file a fraudulent return in your name. Then they can collect your refund and use your information to open credit cards and accounts.
Pro Tip: Get an IP (Identity Protection) PIN, a six-digit number known only to you and the IRS, each year before filing as an added layer of security against thieves. Filing with an incorrect or missing IP PIN will result in the rejection of your e-filed return and it may be flagged for potential fraud until it can be verified. The easiest way to get an IP PIN is to register on the IRS website.
How to protect yourself
Regularly monitor your financial accounts, credit cards and credit scores for unusual activity and fraudulent transactions. If you try filing and are notified that a tax return was already filed in your name, you can complete a paper return and include form 14039 (Identity Theft Affidavit) that provides all the necessary details for the IRS to open an investigation. Request a copy of the fraudulent return to help understand what information was used by the thief.
For additional safeguards during tax season and beyond, consider identity theft protection and restoration services from LifeLock. LifeLock detects and alerts people to possible identity threats, and its dedicated U.S. based Identity Restoration Specialists help people restore their identity if they do become victims. Learn more about protecting your identity at LifeLock.com.
