How to identify a tax or phishing scam

With elaborate tax scams resurging in recent years, it is becoming increasingly important to be more financially literate and to exercise caution. In an ever-evolving digital world, the endless new ways money is exchanging hands presents new opportunities for scammers to take advantage of unsuspecting individuals.

As part of an effort to help inform the community of such dangers, Hall & Company’s Tax Director, Mike Silvio, recently wrote about the new types of sophisticated tax scams and phishing efforts emerging today. Read on to learn Mike’s tips for identifying fraudulent requests and how to protect yourself from today’s savviest swindlers.

Lately, it seems like every day we are inundated with a new threat from some unknown force lurking in the darkness of the internet, trying to steal our information and use it against us. With all of our lines of credit and e-commerce accounts, scammers are using identity theft not only to take the money we have, but the cash we don’t have as well.

It’s a dangerous situation for anybody with a Social Security number. As the complexity of our finances grows, so does the need for more protection and sound financial advice. Where there is confusion, identity thieves see opportunity. How many opportunities? According to online fraud statistics from the consumer credit reporting company Experian, 40 percent of consumers across the world have been targeted at least once.

Sadly, I noticed this surge in dubious behavior last tax season when a few clients of mine received very official looking letters stating that they owed tens of thousands of dollars in delinquent taxes. One client brought me a notice they received in the mail from the “Tax Bureau of Orange County.” Of course, no such organization existed, and I told these clients that this was an elaborate identity theft scam. To the untrained eye, however, the notice was made to look very official.

I called the number on the notice and was upfront that I was a CPA calling on behalf of my client. The line went dead immediately. I tried again and a different person answered. This time, pretending to have received the notice myself, I allowed them to take me through as much of their process as I could without giving up any sensitive information.  I wanted to understand as much of the process as I could to inform others about these scams. Their approach was clearly made to prey on the uninformed, using the threat of legal action and official-sounding jargon to close the trap and steal away the victim’s identity.

Eventually, I’d heard enough and told the scammer that I was a CPA and that I was going to report them to the authorities. As before, the line went dead immediately.  I subsequently did further research and found out that this scam was already known by the authorities and had been perpetrated on other taxpayers across the country using other fake “Tax Bureau” entity names.

In the age of robo-calls and automated email phishing schemes, these elaborate letter and phone scams with a personal touch are unfortunately enjoying a resurgence. In recent years I’ve had an increasing number of clients alert me to these illegitimate notices, but this year was undoubtedly the worst. Even with tax season well behind us, these kinds of scams are still being reported with a different twist – with fake Social Security Administration “officials” reaching out regarding “suspicious activity” in an attempt to steal personal information.

Perhaps the stress over complying with new tax guidelines mixed with the increasingly unusual comfort of hearing a real person on the other end of the line coaxes people into lowering their guard, but the need for caution has never been higher. It is up to each of us to remain diligent in order to combat these scams.

If you receive any calls or notices that you do not recognize or anyone asking for your Social Security number/taxpayer identification number or money over the phone, or that say that you will be prosecuted if you do not pay an outstanding tax liability, do not provide this information to them.  Instead, please contact the IRS at phishing@irs.gov or report it to the U.S. Treasury Inspector General for Tax Administration (TIGTA) immediately. They may already know about the particular scam you are reporting, or on the other hand, they may not.  You can also contact your local law enforcement agency for assistance, as well. Are you a business owner with questions about your taxes or any suspicious documents you’ve received? At Hall & Company, we’re here to help. Our expert Orange County team is experienced in handling all tax and audit matters. If you’d like to speak with an experienced tax specialist, contact us today. For more information about other financial topics, check out our blog.

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