Digital-first lifestyle opens consumers to potential risks during tax season
Consumers have faced a lot of change over the past year with the shift to a digital-first lifestyle, and tax season with increasing risks is no exception.
McAfee’s 2021 Consumer Security Mindset study revealed that while roughly 2 out of 3 Americans (63%) plan to do their taxes online in 2021, 12% of Americans will be doing them online for the first time. With the increase in activities online, consumers are potentially exposed to more digital risks and threats, and it is crucial that they understand how to stay safe online.
According to the IRS, Criminal Investigation identified $2.3 billion in tax fraud schemes during FY2020. Attckers target tax payers every year, but the increase in online filings due to COVID-19 in 2020 presented an even greater opportunity, as scams related to coronavirus tax relief such as Economic Impact Payments, have now earned a spot on the IRS “Dirty Dozen” tax scam list.
Also relatively new to the list are social media attacks – thanks to the rapid development and adoption of social media platforms in recent years. Social media attacks involve scammers harvesting information from social media profiles, then using that data to impersonate someone you know to gain access to accounts, funds and more.
Other common attacks include email phishing attacks, phone calls posing as IRS agents, and robocalls that threaten jail time. Taking advantage of the current environment, many phishing attacks are now leveraging keywords such as “coronavirus,” “COVID-19” and “stimulus.”
Additional tax scams can be harder to spot, such as when a hacker secures someone else’s Social Security number (SSN) and begins exploiting this sensitive information on the dark web and facilitating fraudulent tax returns. The IRS has warned about scams related to SSN, where scammers claim to be able to suspend or cancel the victim’s SSN, hoping that fear will get consumers to return robocall voicemails.
Consumers can do their part this tax season to protect their personal information and keep their finances secure:
- Beware of phishing attempts. Phishing is a common tactic hackers leverage during tax season, so double-check legitimacy of any unfamiliar or remotely suspicious emails. Be wary of strange file attachment names and remember that the Office of Social Security or IRS will not email taxpayers.
- File before a scammer does it for you. The more prompt you are to file, the less likely your data will be raked in by a fraudster.
- Watch out for spoofed websites. Scammers have extremely sophisticated tools that help disguise phony web addresses for DIY tax software, such as stolen company logos and site designs. Be sure to type the URL directly into the address bar of your browser instead of following a link from an email or internet search.
- Make social media profiles private. To prevent social media scams, adjust your account settings such that only friends and family can see them. Additionally, reduce your overall digital footprint to make yourself safer from these types of cybercrimes.
- Consider a holistic security solution to give you peace of mind that your identity and personal information are safeguarded this tax season, either if you are handling on your own online or communicating virtually with your tax advisor.