Every April, the threat from scammers intensifies as they ramp up phishing attacks, fake IRS messages, and various tax-related identity theft schemes, all aiming to steal personal information or divert tax refunds. While this surge is notable, it’s important to remember that such scams can occur year-round. Fortunately, adopting a few proactive habits can significantly decrease your chances of falling victim to these tactics. Whether you file your taxes independently or enlist the help of a tax professional, following these cybersecurity tips can safeguard your data, identity, and refund.
Tax season attracts cybercriminals primarily because tax filings contain highly sensitive personal data, such as Social Security numbers, income details, and banking information. Scammers often impersonate trusted institutions like the IRS or tax preparation services to deceive individuals into providing sensitive information or clicking harmful links. This time of year is particularly stressful for many, with substantial financial implications at stake.
To help mitigate the risk of tax-related identity theft, here are essential tips to consider:
First, filing your taxes early is one of the most effective strategies to combat fraud. Scammers frequently exploit stolen Social Security numbers to submit fraudulent returns and claim refunds before legitimate taxpayers file theirs. By filing early, you limit the opportunity for fraud. Employers are mandated to send out W-2s and 1099s by January 31, so once you receive your documentation, don’t delay.
Additionally, obtaining an IRS Identity Protection PIN (IP PIN) can further enhance your security. This six-digit code helps prevent unauthorized tax filings. The IRS issues a new IP PIN annually, and it can be obtained via your online IRS account. Having this PIN is crucial, especially if your personal information has previously been compromised.
Another layer of security can be added by enabling multifactor authentication (MFA) on your accounts, which requires more than just a password for access. Implementing MFA on your IRS online account, tax preparation software, and banking accounts makes it substantially harder for cybercriminals to breach your information, even if they have your password.
Be on the lookout for fake IRS communications, particularly at this time of year. Scammers often send unsolicited messages posing as the IRS, tax professionals, or financial institutions. Alert signs include unexpected IRS communications, urgent threats about account action, requests for sensitive information via insecure channels, and suspicious links or attachments. If an email seems suspicious, never click any links or download attachments; instead, report it to your work’s IT department or your email provider.
If you work with a tax preparer, inquire about their security measures. Key questions include how they protect client data, the use of secure portals for document sharing, and their data retention policies. A trustworthy tax preparer should employ encryption and limit access to sensitive information.
When it comes to sharing tax documents, avoid regular email as it’s not a secure method of transmission. Opt for encrypted email or a secure file-sharing process recommended by your tax preparer. If mailing documents, consider using a trusted courier service with tracking.
Backing up your tax records is another prudent step. Create both digital and physical copies of your documents, storing electronic files in encrypted cloud storage or on an external hard drive, and keeping paper copies in a secure location. The IRS recommends retaining tax records for at least three years.
As tax season approaches, adopting these smart habits will not only help alleviate your concerns about identity theft but can also make the process far less stressful. By filing early, utilizing IRS protections, enabling MFA, and remaining vigilant against scams, you can significantly enhance your defenses against potential threats. Stay informed, and safeguard your tax season.