Tax fraud has always been very lucrative for cyber criminals and this year prepares to be even worse than usual as the first effects of the Equifax data breach could be felt. In 2016, the Internal Revenue Service (IRS) stopped 787,000 attempted tax returns that were the result of stolen identities. Although the IRS continues to increase its safeguards to minimize the number of fraudulent tax returns, it is really up to the individual.
In addition to hackers continuing to find ways to access personally identifiable information (PII), Equifax, one of the largest credit monitoring organizations in the United States, suffered a data breach in 2017 in which 143 million accounts that were leaked from May to June. This means that as many as 143 million people could have had their social security numbers leaked, making it easier for their identity to be stolen. As tax season comes into full swing, here are 3 tips to make sure that you are taking proper precautions:
- File your taxes as soon as possible.
- This is the number one recommended step by the IRS in securing your tax returns. Not only does this result in getting a return sooner, it also means that if someone attempted to file your returns in order to receive a tax refund, they will be unable to do so. Although this does not solve the problem of the potential hacker having access to your information, it is one step toward making sure that you are protecting your returns.
- Monitor the IRS list of tax scams.
- This is particularly important if you deal with business revenue or business tax because it lists this year’s most common scams that you can translate into appropriate training or educational materials for your employees or finance department.
- Take action if your returns are breached.
- If you find out that your tax returns have been breached, perhaps by trying to file and finding out your W2s have already been filed, immediately contact the IRS. Unfortunately, there is not a quick fix but the only way to get your return eventually, and to make authorities aware that you are a victim of identity theft, is to follow the steps on this page.
Tax fraud can take many forms, such as W2 phishing hacks, identity theft through access to your social security number, or other information that has been breached. Making sure you’re aware of the current trends is an important step to stay ahead of the hacks. If you have a business, making sure your business is staying up to date on cyber hygiene is the most important thing to protect your and your customers’ data. For more information on W2 phishing scams, click here.