Tax Day is Coming. Here’s What You Need to Know.
Chris Grumboski of CMIT Solutions shares some tips on the upcoming tax season.
Tax Day is just over a month away. And whether you’ve already filed your taxes or plan to wrap things up at the last minute, it’s time to be smart with your financial information.
The Internal Revenue Service, state tax agencies, and tax professionals continue to identify new phishing scams. Some find bad actors posing as potential clients or even the IRS to try and trick tax preparers into disclosing sensitive information.
In addition, tax returns continue to represent one of the most in-demand forms of cybercrime: in 2019, the IRS received thousands of reports of data breaches related to CPAs and tax firms, continuing a year-over-year trend of significant increases.
Hackers move fast, as well, often rushing to file fraudulent returns before legitimate taxpayers can do it themselves. This February, the IRS revealed details of some of the fake tax returns that had already been filed, containing accurate taxpayer names, addresses, Social Security numbers, and even bank account information for the victims.
Surprisingly, some of those illicit refunds were then deposited in the legitimate taxpayer’s bank accounts. Some criminals then doubled down on their ruse by posing as debt collectors and reaching out to consumers to notify them that the refunds had been sent in error. The victims were then urged to forward the money to the original hacker.
Since these fraudulent returns included the taxpayer’s correct information—all the way down to the right number of dependents—the IRS suspects that the scam originated in the offices of tax professionals. Many of these preparers are targeted with phishing scams that install malicious software onto desktops, laptops, networks, and servers. That malicious software in turn allows protected information to be compromised.
So what can tax preparers and payers do to stay safe with Tax Day just a week away? CMIT Solutions recommends the following strategies, all of which should be backed by the support and consultation of trusted IT and tax professionals:
1. Looking to file electronically? Use a secure Internet connection.
Whatever you do, don’t file your tax return (or even work on it) while connected to public Wi-Fi at coffee shops, hotel business centers, airports, or other public places. Make sure any site you connect with has “https” in the URL, that any connection you use is password protected, and that you manually type out links to tax preparation software rather than following links from emails.
2. Are you a CPA or other financial professional? Don’t communicate solely through email.
Whether it’s a potential or existing client, beware of conducting sensitive requests for duplicate W-2 copies, address changes, Social Security numbers, email addresses, or financial information through email. The recent spike in phishing scams (see below for sample emails) means no valuable data should be transmitted electronically when a phone call or in-person meeting will suffice.
Read the rest at CMITSolutions.com