10 Tips to Avoid Online Tax Fraud
The busiest tax season is here, and 2016 is witnessing large number of online tax scams
March 15, 2016 — The tax season is in full motion, and the IRS does not have a relief from fraudsters, announcing the temporary shutdown of its taxpayer online identity protection tool, PIN.
The shutdown is a result of taxpayer complaints that their personal ID numbers have been compromised at least 800 through the end of February.
Over the period from March 7 t0 March 9, criminals have stolen W-2 data of California data security company Seagate Technology and New York Mansueto Ventures. IRS has also newly revised the data from last year, confirming that around 700,000 Social Security numbers might have been stolen.
In order to stay safe when filing taxes online, there are simple precautions everyone should be aware of. NordVPN, a VPN service provider that helps secure online user experience, advises some simple steps:
1. Be aware of ‘spoofed’ websites that look like official websites but are not
After a fraudster builds such a site, they will usually send you an email asking to verify your information (due to security breach or any other reason). Known as phishing, these emails typically contain a link (that you should not click on) and ask a bunch of personal questions to verify your identity (that you should not answer). One way to distinguish an official website from a fraudulent one is by using HTTPS URL: the ‘s’ in the URL means that it is a secure protocol and your data is encrypted properly.
2. Beware of websites promising inflated refunds
This month IRS warned taxpayers to be on the lookout for tax return websites pushing inflated tax refund claims. This scam is on the annual list of tax scams known as the ‘Dirty Dozen’ for the 2016 filing season. Make sure to check the background of your tax preparer to see if they are registered with IRS.
3. If you receive a phone call about your tax returns
Keep in mind that IRS would not call you to ask for a payment. So don¹t give out any of your tax sensitive information over the phone.
4. Use a VPN when giving sensitive information online
In addition to making sure that a site you use has ‘https’ in its URL, make sure you use a VPN (Virtual Private Network) when you do just about any transaction online. VPNs encrypt all the data you share across the Internet on any website. They are the best security mechanism you can employ to make sure the data you share over the Internet is safe from prying eyes.
5. Strong passwords
Fraudsters are stealing usernames and passwords of taxpayers: make sure you regularly change your password and your password is not easy to guess.
6. Public Wi-Fi
Never file taxes via public wifi hotspot – if you have no choice and have to, always use a VPN to keep your information private.
7. Social media rules
Set your social media pages as private/³inaccessible² to the whole world (criminals can explore how many children you have, and get other information about you that they can use on your tax returns).
8. Storing your tax return info
Keep your tax return information and sensitive data backed up in an encrypted hardware.
9. Educate everyone in your family about cyber security and online safety
Teach your family members to use strong passwords, explain the dangers of public Wi-Fi, and share news of hacks and scams.
10. When the tax season is over, your online precautions should not diminish
Fraudsters lurk online all the time and can steal your data when you shop online, do banking transactions or go on Facebook. Don¹t reveal your financial information on social channels (i.e. WhatsApp or Facebook), beware of open Wi-Fi threats, and don¹t leave your flight ticket stubs lying around don¹t photograph them either (they have encoded personal data). Make sure you use a VPN service year round to make your online activities safe.