A Tax Season Fraud Alert from Your BBB

January kicks off the tax season, and the deadline for individuals and businesses to send in their year-end tax forms, April 15, is rapidly approaching. Unfortunately, each new tax season comes with scam-artists who try to steal identities and drain the bank accounts of unsuspecting tax filers.

Your Better Business Bureau reminds consumers to be prepared to avoid spoof emails, advance fee check scams, and fraudulent phone calls from Internal Revenue Service impersonators and overseas fraudsters.

WARNING: Tax-related scams can lead to identity theft.

Tax-season identity thieves will often promise speedy tax refunds or tax savings to establish false credibility and convince people to disclose sensitive personal information. They pose as the IRS or as a legitimate tax preparer by flaunting a copied name or logo. Then, they pretend to offer direct deposit options for federal returns in order to gain access to the victim’s bank or financial accounts, run up charges on credit cards, apply for new loans and credit cards, and even file fraudulent tax returns.

Consumers should be aware that there are hundreds of variations of tax-related scams; here are the two most common ones to be on alert for:

• E-Mails and phone calls come from frauds claiming to be IRS agents or representatives and they ask for Social Security Numbers, driver's license numbers, loan and bank or credit account numbers, health insurance ID numbers or other personal information in order to supposedly process tax refunds or clear up errors with tax returns.
• In other cases, scammers pose as tax preparers claiming to have the ability to lower taxes due to the government, or significantly increase and expedite the tax refund process.

Your BBB offers advice to help consumers avoid becoming a victim of identity theft during tax season:

Protect yourself from identity theft. Be suspicious if anyone claiming to be from the IRS contacts you. In reality, the IRS does not initiate taxpayer communications through e-mail. Legitimate tax preparers and IRS representatives will never contact a taxpayer to request a password, Social Security Number or bank account numbers via an unsolicited e-mail. If it is the IRS contacting you, they should already have your contact information on file. Consumers should be extremely careful when releasing this information to anyone, particularly over the phone or Internet.

Identify bogus e-mails.  Phishing e-mails typically begin with “IRS Notification - Please Read This” or a similar urgent introduction and often contain grammatical errors or punctuation irregularities. Phishing e-mails ask the recipient to click on a provided link, for example: “To access the form for your tax refund, click here” or “Access our Webpage by the link provided here.” A message ending with a generic salutation, such as “Regards, Internal Revenue Service,” is a major indication that the e-mail source is fraudulent.

Notify the IRS. If you receive a suspicious e-mail that appears to be from the IRS, do not reply and do not click on any links or open any attachments; these e-mails may include a link to a forged IRS Web site as part of a virus-related phishing scam. Remember: The IRS will never contact you by e-mail for account information. To report the incidence, forward the message to phishing@irs.gov. Then, delete the e-mail immediately. The actual IRS Web site is www.irs.gov, which provides additional instructions on how to handle tax record identification theft issues.

Report spam and avoid identity theft. Forward suspicious e-mails to the Federal Trade Commission at spam@uce.gov or call 1-877-IDTHEFT (438-4338). Visit www.ftccomplaintassistant.gov or www.onguardonline.gov for more resources.

Secure your files. Avoid storing documents that contain personal or sensitive information, such as your W-2 forms, for longer than you need them. Never store your private documents in unsecured locations, such as your car or your office workspace.  If you do not need your old paperwork, shred it. 

How your local BBB can help fight against identity theft.

Identity Theft is a common and growing problem, and with new avenues for scammers to pursue, protecting yourself is a must. Visit BBB's Secure Your ID Day ; BBB's website lists free document shredding events in Alaska, Oregon and Western Washington. At the minimum, any unneeded documents that contain financial information, account numbers, PINs, birth dates, or Social Security numbers should be shredded. Examples include expired ID cards, legal documents, credit card and bank statements, cancelled checks and carbon copies. BBB will accept up to three grocery bags of paper per person (no cardboard or three-ring binders).

Secure Your ID Day:

Check out your prospective tax preparer.  Make sure you choose a tax preparer that you trust before handing over documents filled with personal data. Look for a local, reliable tax preparer that is properly licensed and has proven experience in tax preparation. 

To get a free BBB Reliability Report on a tax preparer, visit www.bbb.org.

About your BBB serving Alaska, Oregon and Western Washington:
Your Better Business Bureau is a not-for-profit organization funded by Better Business Bureau accredited businesses. The BBB’s mission is to be the leader in advancing marketplace trust. For more information about the services and products provided by your BBB, call 206-431-2222 or 253-830-2924 in Washington, 503-212-3022 in Oregon, 907-562-0704 in Alaska, or visit our Web site at www.bbb.org.