Beware of Tax Time Scams

With North Americans concerned about their money as tax deadlines approach, scammers and cybercriminals are looking to take advantage.
March 2011
by Robin Wark

The deadline to file annual personal tax returns is April 15 in the U.S. and April 30 in Canada. As the filing dates approach, there are more and more reports of scams – many of them online. A basic rule of thumb is to be wary of messages – email, phone or via the mail – purporting to be from the IRS, the Canada Revenue Agency or similar organizations.

"Scam artists know that this is tax season, and they are trying to confuse consumers who are preparing to file their taxes," Ohio Attorney General Mike DeWine said in a statement, "and you should not click on links in any suspicious e-mail messages."

A common scam in the United States is an email message with a subject line of something like "IRS Tax Payment Notification #2963706." The message often states that it has been determined you will receive a certain amount of money as a refund and all you have to do is submit certain personal details. The message might look official, sometimes even containing the IRS logo, but it is certainly not.

"The IRS will never e-mail you about your taxes – never," IRS spokesman Dan Boone said in a Feb. 28 aol.com article.

In Canada, there have been reports of people receiving letters purporting to be from the CRA. They say that a form needs to be filled out so that a tax return claim can be processed. This is, of course, another scam.

In both of these cases, the would-be thieves are trying to gain your personal information so that they can get access to your accounts or commit identity theft. They could use your confidential information to open credit card and other accounts in your name.

When these type of scams are carried out electronically, it is known as phishing. Often common in these schemes are email links that you are encouraged to click on. They lead to websites that might look to be legitimate, but are not. If you want to visit a website, do so by typing the URL into your browser directly.

When searching for the IRS and other organizations, you should be aware of that other sites might have similar URLs. The IRS’ website is IRS.gov. However, there can be sites that have a similar name with a .com, .net, .org or other suffix. These might be legitimate businesses in their own right, but are unconnected to what you are looking for.

In 2010, 70 per cent of all individual tax returns - 99 million people – utilized the IRS’ e-file service. When using your PC to file your tax return, you should be very careful. Keyloggers and other spyware could be used to swipe the confidential info that you will be inputting this time of year. You should use a firewall and regularly scan with a security product such as ParetoLogic XoftSpySE Anti-Spyware (free scan).

Many of the standard online tax filing programs let you save a copy on your computer. This will include important information, such as your social insurance or social security number. While it is handy to have a copy, you should consider not keeping a version on your PC. If you have a laptop and it gets stolen, your info could be used for identity theft. As well, if you have peer-to-peer file sharing software on your machine, there is the possibility that someone could – depending on which folders you have decided to share – obtain that document.

It is also important to note that even if you are e-filing your taxes, the IRS – in most cases – does not have your email address. So, if you receive an email claiming to be from the service, it is most likely a phishing attempt. Boone explained:

"We would never put your personal or business information in an email because we know that is not a secure way to communicate."

"Even if you e-file your taxes, you are going through a software company, and any emails you get, including the one confirming IRS receipt of your tax return, will come through the company – not directly from the IRS."

Boone is not implying that the software company will try to fleece you. There are, however, certainly many cybercriminals who will utilize tax time as a way to separate you from your money and personal information.

Microsoft is a registered trademark of Microsoft Corporation in the United States and/or other countries.