With 2020’s tax season less than two months away, tax identity thieves will be trolling the internet for your personal data more than ever. The Federal Trade Commission reported tax fraud as the second most common form of identity theft to date. Just last year alone over $46 million dollars were claimed in fraudulent tax refunds according to the IRS.
One of the largest IRS tax theft scams in US history occurred only three years ago. Michael Oluwasegun Kazeem, a resident of Oregon and Nigerian native, spearheaded the scheme which lead to over:
- 124,500 stolen identities
- 19,500 stolen E-File PINS
- 10,139 fraudulent federal tax returns
- 2,000 fraudulent wire transfers
- $91 million generated in fake refunds.
In 2018, he was sentenced to 15 years in prison for leading the operation and ordered to pay $4.3 million in restitution. He will be deported upon completion his sentence.
“Snowball” Effect
This scam recently reared its ugly head in our Firm when a potential client reached out to us for help after one of these Nigerian scammers stole the potential client’s identity and his refund! While having your tax refund stolen is aggravating, it’s not the end of the issue for most tax identity theft victims. It can delay the filing of your own real return and set the victim back with the IRS for months by having to prove your own identity to the IRS. This can cause the addition of unwarranted tax bills, interest and penalties along the way.
It can also evolve into delayed or unfiled returns--even though it’s not the identity theft victim’s fault. And, if someone is already behind on filing, it can make tax problems worse.
But there is hope. The best medicine is to be proactive – as they say, “an ounce of prevention is worth a pound of cure!”
Here are some preventative steps you can take personally as a taxpayer to avoid tax swindlers and scammers:
1. Keep your SSN Safe . . . and Protected!
The safest place for your social security card is at your house. You should always keep your social security number private and try to commit it to memory. If you carry your SS card on your person, you are at risk of it being physically lost or stolen. Save yourself the trauma and leave it at home. And, don’t give it freely to anyone who calls you, texts you or emails you asking for it! Verify their identity first and when in doubt – just say no I’m not comfortable giving this to you.
2. Invest in Security Software
Install firewalls as well as anti-spam and antivirus programs on your computers. It’s worth the investment! And, update your technology on a regular basis to prevent crooks from seizing your personal information. The cyberworld is evolving so quickly it is hard to keep up, but it’s worth considering a technology check-up with a good reputable IT provider. We can recommend some if you’re looking!
3. Avoid Suspicious Emails
This is THE most common way for cyber-thieves to get your information! Period. Hands down! So, when in doubt trust your gut. If it looks “fishy” – it probably is! If you don’t recognize the sender’s name or the domain that the sender is using do not click open it. And, by all means do not click on any attachments if they seem weird. One recent scam includes fake “invoices” from seemingly reputable vendors like your utility company or some other business with “unpaid or updated invoices” attached. When the recipient clicks on the invoice everything on the computer gets stolen or encrypted! So, when sorting through your inbox, treat any suspicious emails containing links as you would the plague.
4. Safeguard your Passwords and Other Data especially on Social Media
Change your passwords frequently and use double authentication as a means for added protection. Make your password work for you. Creating complex or special passwords that only you could think of is one of your best shields against cyber-criminals. And, if you’ve been hacked in the past, it would be wise to consider investing in personal data protection software that sends in-time alerts to your email or phone.
About social media, between 2017-2018, there was a 23% increase in data taken from online social media profiles and posts, including phone numbers, birthdays, hometowns, school mascots, and other personal information. Limit the information you share and items you post.
5. Personal Data Protection Technology
If you own a business, and have numerous online accounts (marketing, banking, communication, supply ordering) statistically, you are opening more windows for thieves to enter through. Change you your passwords often! Additionally, small businesses have evolving duties to protect customer information through cybersecurity measures. We strongly recommend having a thorough check-up by a reputable security company to determine weaknesses and strengths.
If you think your identity has been stolen and used for tax fraud, please don’t hesitate to act quickly. Getting in front of the scammer is critical, and the IRS will not be lenient. You’re going to have to prove who you are and that you’ve been scammed to convince the IRS to make changes to your tax bill.
As always, we are here to help you. Give us a call or email us anytime to get started with your free initial consultation.
