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Be Prepared: Fraud Is On The Rise During Tax Season

Did you know that ALREADY the IRS is warning that is has seen a 400% surge in phishing and malware compared to the last tax year?  Unfortunately tax season now coincides with “fraud season”.

Last week the IRS warned of the dramatic increase in official-looking text and email messages that taxpayers have received.  Phishing messages have been received asking for a wide variety of sensitive information, including filing status, personal information confirmations, PIN verifications, and more.  The messages have been created to look official as if they have been sent from the IRS or a tax software company and are being received in every corner of the United States.

Next time you open up that email that is asking for important personal information, take notice of who the sender is and the link that they are trying to make you click on.  Chances are that the link is hyperlinked to a fraudulent website, in hopes that you enter in your information there.  A trick is to “hover” your mouse above the link and then see where you are really being re-directed, if the link looks odd (which it probably will), then delete the email.  If you are unsure, you can always send the email to your CPA, and he or she can then advise on the validity of the email.

Remember: The IRS generally does not initiate contact with taxpayers by email, text, or social media, or phone calls for that matter. So if you receive a message, be suspicious!

Some subject lines that the IRS has seen in phishing scams, include:

  • Confirm your personal information
  • Get my IP PIN
  • Get my E-file PIN
  • Order a transcript
  • Complete you tax return information
  • Variations about people’s tax refunds
  • Update your filing details, which can include references to W-2

To report a phishing scam to the IRS, email phishing@irs.gov.

This blog was created for your protection, please be aware of these circumstances and alert your CPA if you are ever unsure.  We have experience in dealing with the IRS and can quickly let you know if something is or isn’t a fraudulent message.

Criminals Stole Data From 330,000 Taxpayers Off IRS Website

This week, the IRS reported that the initial data breach on taxpayer data was much worse than initially stated… 3 times worse. Back in May, we reported that the breach had compromised 100,000 accounts, based on initial reports from the IRS. After conducting an extensive review covering the 2015 filing season, the IRS realized that the number of accounts that had been breached was actually more like 330,000. However, we are sure this number will rise in the coming months.

The cyber group that remains unnamed, attacked the IRS through the “Get Transcript” tool. This group then duped “Get Transcript” by using previously acquired stolen information and downloading millions of people’s tax documents. “Get Transcript” has since been disabled to prevent any more fraud.

How Do You Know If You Are A Victim?

The IRS will be sending letters to each taxpayer whose information has been breached that warns them of potential identity theft. It is very important that if you receive this letter, you contact your CPA or you follow the steps that the IRS recommends to protect you from future issues. This includes an extra PIN number to protect your future tax filings and free credit protection.

Are You Safe Now?

The answer unfortunately is no. Off of tax forms, these criminals had access to salary, family information, property and investment values. In addition to identity theft, these criminals are able to claim bogus tax refunds and are also able to open lines of credit in your name. Unfortunately it is becoming increasingly difficult to secure anyones information in the digital age.

Remember: The IRS will not call, email or send you letters for your personal information in response. Scammers and thieves see this as an open opportunity. These thieves will try emailing malicious links to alleged receipt of funds or calling taxpayers and posing as the IRS to receive funds. If you have a situation occur and you receive an email or a phone call from the IRS, contact your CPA. Your CPA will be able to tell you if it is a scam or not. Contact LBA Haynes Strand regarding a scam attempt – click here – and our team will get back to you ASAP!

Fraud Alert: Rise in Imposter Fraud

Imposter fraud is the most recent attempt of fraudsters to trick businesses out of money. Imposter fraud is when a fraudster poses as a person or an entity that you know. They could pose as an executive of your company, a vendor, or even the IRS! 

In these instances the fraudster will most likely contact you by email. The only problem is, the email looks exactly like the one you receive from the person you know, even down to the email signature. When the fraudster is posing as an executive at your company, they will attach an invoice and instruct you to make payments, usually by wire transfer. Most employees would take an email from their CFO or Controller as a direct order and would pay the invoice without any hesitation. This is exactly what these fraudsters want. We have heard from numerous companies in North Carolina that have seen this attempt at fraud. Some have caught on to this fraud before sending money, others unfortunately have not.

When the fraudster is acting as a vendor they will most likely send you a similar email as your vendor would. However, they will request that you change the original vendor’s payment instructions and that you pay the account of their choice. In addition, they may also hack into your email account and find trends of who you do business with. This allows the fraudsters to create fraudulent invoices or payment requests with very subtle differences than the original invoices.

So, how can you reduce this risk?

First of all, you need to alert your employees and tell them to be aware of scams such as these. No payments should leave your office without being approved by multiple people in your office. If something seems odd or off about a request for payment, be sure to discuss the matter first hand with the executive or the vendor in question. This could alleviate any concerns you had and could protect your company against this fraud.

Education is truly the best way to prevent fraud. We must learn from what others have seen in the marketplace in order to create best practices in these kinds of situations. We challenge you to discuss openly any external attempts at fraud that you have seen. Discuss these cases with your friends, at networking events, at chamber meetings, on social media, etc.

To learn more best practices and speak to a team of CPAs that understand how to safeguard your business against fraud. Contact us for your no-cost consultation.