Article

IRS alerts taxpayers of cyber, refund scams

March 24, 2021 · Authored by Paul Dillon, Michelle Hobbs, Mike Schiavo

Tax-related identity theft continues to be a problematic issue and is becoming more dangerous as scammers adapt to preventive measures taken by the IRS and law enforcement. Thieves work year-round to steal personal identification, bank or investment account balances, and tax payments or refunds.

This year’s stimulus payments and tax law changes are providing scammers additional opportunities to attempt to deceive taxpayers into giving them access to their computers and personal information. Email, telephone calls, text messages and social media channels are all used to persuade or intimidate taxpayers into providing such data. With the extension to May 17 for the April 15 deadline, this alert is to remind taxpayers to remain vigilant in protecting sensitive information throughout the year.

Tax document scam

One of the most recent schemes involves emails supposedly containing tax documents. Hackers entice the recipients to open embedded attachments, which then release malware onto computers capable of stealing personal data and possibly even tax refunds.

Taxpayers receive an email seemingly from a trusted source containing documents purported to be related to their tax return. If opened, these attachments appear blurry on the screen and a “helpful” prompt pops up asking the viewer to click through to edit the documents. Under the guise of viable software, often even including fake service package offerings, promotions and sales, the taxpayer, instead, downloads onto their computer invasive malware, which now allows scammers to steal personal data and potentially access connected or related computers.

COVID-19 scams

Taxpayers should also be aware of multiple types of pandemic-related scams. Hackers use phishing schemes via email, letters, texts and links coupled with COVID-19 or other pandemic-related language to obtain personal identifying data, passwords and other login information in order to steal economic impact payments and other stimulus benefits. Fake charities are another mechanism thieves are using to play on people’s emotions and instead steal money and identifiable information.

Fraudulent refunds

In the refund scam, perpetrators execute the heist by stealing taxpayer data and using it to file fraudulent returns by posing as the taxpayers. Overpayments are refunded via direct deposit into the taxpayers’ bank accounts. Then the thieves contact the taxpayers, stating the refunds were deposited in error and ask that they be returned.