Mark Pribish

Tax Season Ripe for Illegally Harvesting Taxpayer IDs and Tax Refunds

By Mark Pribish
Vice President and ID Theft Practice Leader

The Internal Revenue Service (IRS) isn't the only one excited about taxpayer season — ID theft criminals are too because it's one of their most lucrative windows of opportunity each year. Tax filing season begins on February 1st and to help you protect yourself and your family, this week's column is focused on guidance and caution in filing taxes, selecting a preparation service and increasing your awareness of IRS related scams to guard against identity theft.

"Will the real taxpayer please stand up?" Since 2008 the IRS has struggled to curb taxpayer identity theft and refund fraud with over 1.2 million tax-related identity theft incidents. A September 2014 General Accounting Office (GAO) report states, "the IRS paid $5.2 billion in refunds based on fraudulent tax returns in 2013."

Though 2013 showed a decrease, according to the Federal Trade Commission (FTC), the problem of taxpayer ID Theft and fraud continues to be a significant problem. In 2013, nearly a third of all ID theft complaints pertained to taxes or wages.

Identity theft criminals steal Social Security numbers and taxpayer related information to file fraudulent tax returns and to steal refunds. When you, the real taxpayer files, your refund will not be paid until the IRS resolves your individual case, potentially delaying your refund for up to a year or more.

Tax Season Identity Theft

First, ID theft criminals know a large number of tax filing documents from employers, financial institutions, financial services firms, healthcare providers, insurance companies along with others are often sent via the U.S. Post Office and/or email.

Thus identity theft thieves will try to steal your personal information from the U.S. Post Office, your mailbox or your personal and business email accounts by hacking into emails. Stay vigilant on how and when you receive your tax documents.

Second, research your tax preparer for any negative past history, as there have been numerous news stories of tax preparers being arrested and convicted of stealing tax refunds using stolen identities.

Think about it, we give our tax preparer our most personal information including Social Security number and those of our family members. Your preparer knows about your financial assets, your bank account information, kids information and even your marital status – so be vigilant on who you trust to do your taxes.

If you believe you are an ID Theft victim or are at risk of becoming an ID Theft victim due to your personal taxes or a lost or stolen purse or wallet, questionable credit card activity or credit report, you can take the following action:

Make it harder for ID theft criminals by filing your returns in a timely manner to help avoid a criminal filing on your behalf. Pay careful attention to and protecting all facets of your 2015 tax filings and making sure you can trust your tax preparation service.


To learn more about these threats and how to protect yourself and your family from Identity Theft, you can read my past newsletters at the Merchants Identity Theft Educational Website at www.idtheftedu.com.


BBB Releases Top 10 Scams of 2014

Better Business Bureau (BBB) hears from thousands of consumers and business owners every year about various scams and fraud. While many are new twists on existing scams, it seems scammers become more sophisticated every year in how they spoof trusted names and fool consumers.

"Because many scams go unreported, it is difficult to indicate which are the 'biggest' in terms of the number of people affected or the amount of money lost," said Matthew Fehling, President/CEO of BBB. "However, BBB's list is composed of scams that seem the most audacious nationwide."

10. Sweepstakes Scam: You've won! Whether a contest, the lottery, or the Publishers Clearinghouse Sweepstakes, consumers are tricked into paying fees or taxes - in advance - to claim or release winnings.

9. Click-Bait Scam: There are many forms of click-bait scams, but the most notorious in the past year was the use of fake videos after the Malaysian Airline plane went missing. Other click bait schemes use celebrity images, fake news, and other enticing stories to get consumers to unintentionally download malware.

8. Robocall Scam: The notorious "Rachel from Cardholder Services" resurged in 2014. The robocall scam claims to be able to lower credit card interest rates by taking personal information – including credit card numbers – only to charge fees to consumer cards.

7. Government Grant Scam: Consumers receive a call saying they've been awarded a government grant for thousands of dollars and all they have to do to collect the grant is pay a couple hundred dollars in fees by wire transfer or prepaid debit card. The caller may even mention a program on the news to build credibility.

6. Emergency Scam: Sometimes called the "grandparent scam" because it often preys on older consumers, the emergency scam takes thousands of dollars by calling or emailing relatives saying a grandchild or family member was injured, robbed or arrested while traveling and needs money ASAP.

5. Medical Alert Scam: Targeting older adults, scammers call or visit claiming a concerned family member ordered a medical alert device in case of emergency. The scammer takes credit card or banking information promising to deliver the device, but never returns.

4. Copycat Website Scam: An email, text message or social media post announces a terrific sale or exciting new product hoping consumers click through. Even though the site looks legitimate, after placing the order, consumers receive cheap counterfeit merchandise or nothing at all… and now their credit card number is in the wrong hands.

3. "Are You Calling Yourself?" Scam: Scammers often use technology to make a call appear like it's coming from any company and any number. The latest trick put consumers' numbers on the Caller ID, making them curious to pick up the phone or return the call, involving them in whatever scam they are running.

2. Tech Support Scam: A call - or a pop-up on the computer - is received claiming to be from Microsoft (or Norton or Apple) about a problem on the computer. Scammers say if given "tech support" access to the hard drive, they can fix the problem. Once access is granted, scammers install malware on the computer and steal personal information.

1. Arrest Scam: Someone claiming to be a police officer or government agent (often the IRS) calls saying they'll arrest you for overdue taxes or skipping out on jury duty; however, to avoid being arrested, you can send money via a prepaid debit card or wire transfer. Whatever the "violation," many people pay out of fear of being arrested.

Why Scams Work:

There is a science to scams, and it may be surprising to know that scammers use many of the same techniques used by sales professionals. The difference, of course, is that a scammer's "product" is illegal and could cost consumers time and money. Below, are techniques scammers use.

  • Establish a Connection: The scammer builds rapport and a relationship. Depending on the scam, establishing a connection can be achieved face-to-face, as in home improvement scams and many investment scams, but also online, as in many romance scams.
  • Build Credibility: The scammer uses fake websites or hacked emails to appear legitimate. Most email phishing scams spoof real companies, and many scammers pretend to be someone they are not in order to build credibility.
  • Play on Emotions: Scammers rely on emotion to get people to make quick decisions before having time to think about it. An emergency situation or a limited time offer is usually a scammer's methodology. Scammers count on emotional rather than rational decision-making.

What To Do:

  • Don't be pressured into making quick decisions.
  • Take ample time to conduct research on any business, charity or organization at bbb.org.
  • Never provide personal information (address, date of birth, banking information, ID numbers) to people you do not know.
  • Don't click on links from unsolicited emails, text messages, or social media posts.
  • If unsure about a call or email that claims to be from your bank, utility company, etc., call the business using the number on your bill or the back of your card.
  • Never send money by wire transfer or prepaid debit card to someone you don't know.
  • Never send money for an emergency situation unless you've been able to verify the emergency.

Trusted Resources:

  • For more information on these and other scams, visit BBB Scam Stopper (bbb.org/scam). Sign up for weekly scam alerts and report scams.
  • For information on investment scams, refer to BBB Smart Investing, a partnership with the FINRA Investor Education Foundation.
  • To search any business or find your local BBB, go to BBB.org.
  • For information on charities, visit the BBB Wise Giving Alliance at Give.org.
  • For information on U.S. government services, visit USA.gov.

For More Information

Check out the full alert on the Council of Better Business Bureaus website. To find out more about other scams , check out BBB Scam Stopper.

Courtesy of the Better Business Bureau - for more information visit http://www.bbb.org/phoenix/news-events/

If you believe your identity has been stolen, call 866.SMART68 today.