Tax & Phishing Scams 101

Tax and phishing scams have always been a risk for consumers, with the evolution of the internet constantly changing these scammer tactics. In recent years, these unethical tactics are becoming increasingly difficult to identify, resulting in many unsuspecting consumers paying the price – some without even realizing it. 

Background on Tax and Phishing Scams

According to Experian, 40% of consumers have been targeted for a scam at some point in their lives. While this number may seem shockingly high, these numbers are expected to continue rising as internet usage increases across generations. In order to protect yourself from a phishing scam, it’s important to understand the information they are looking for. 

While many consumers believe scams don’t pose a threat to them because they do not have significant digital funds available, scammers are not just looking for credit card numbers. Scammers are typically in search of valuable personal information such as social security numbers, taxpayer-identification numbers, banking credentials, passwords or personal details that could lead to identity theft. It’s crucial to guard all personal information closely, not just financial information.

Common Imposter Scams & How to Avoid Them

Imposter scams are some of the most common and effective ways that cyber-criminals steal information. Through the use of fake authority, scammers convince consumers that they are part of a trusted organization in order to gain access to otherwise private information. Many times, these scammers create fabricated stories that evoke urgency or panic in the consumer. They do this by threatening false consequences that convince people to comply with demands without hesitation or questions. 

One type of imposter scam is a tax collection scam, in which a scammer contacts you demanding immediate funds – often via wire transfer or prepaid debit – claiming to be part of a legitimate organization. For example, a scammer could claim to be a part of the “Tax Bureau of Orange County”, complete with official-looking seals and email headings. While receiving a notice addressed from this organization demanding overdue tax collection may seem threatening and send consumers into a panic, in reality, there is no threat. In this case, the Tax Bureau of Orange County does not even exist, however it can appear very real to unsuspecting consumers. For this reason, consumers must be hyper-vigilant about sharing their personal information, making sure to only release these private details to legitimate organizations. While scammers may become flustered or fall back on more false threats of fines or even arrest when questioned, a legitimate organization will never have a problem proving their credentials.

Another type of imposter scam is based around false verification forms. This method of phishing can be very effective because of its sneaky, under-the-radar approach. These scams can come in the form of any digital communication such as an email or a text message. Messages will often mention an update to systems or some need for verification of personal information, often followed with links to false verification forms. In these cases, it’s always best to contact the supposed organization directly and never click the link included in the message. As mentioned above, a legitimate organization will always be willing to prove credentials or be contacted on their mainline, while scammers will often use avoidance tactics when questioned.

Next Steps After You’ve Been Scammed

If you have any belief or suspicion that you’ve been contacted as a part of a scam, it is important to pause all communication and refrain from providing any information until taking the proper precautions listed.

If you receive a potential scam call, first, contact the IRS at phishing@irs.gov or report it to the U.S. Treasury Inspector General for Tax Administration (TIGTA) immediately. This alerts these organizations of new scams as well as provides more information to help identify and catch known scammers.  Additionally, you can also contact your local law enforcement agency for assistance in these scams. 

Do you still have questions or doubts 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.

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