Even if your tax return has fewer zeros than Mitt Romney’s, it contains a cornucopia of information prized by identity thieves. And as consumers have become more savvy about identity theft, criminals have come up with increasingly ingenious ways to hijack tax returns for nefarious purposes.
Here’s a look at this year’s most popular scams, and how to avoid them:
•Fake emails from tax preparation software providers. These so-called “phishing” emails are designed to steal financial information or infect recipients’ computers with harmful viruses.
The increase in these emails illustrates how easily crooks adapt to changing times. In the past, crooks often used fake emails from the Internal Revenue Service to lure taxpayers into sharing personal information. The IRS responded by repeatedly reminding taxpayers that it never sends emails to individuals seeking personal information about their tax returns or refunds.
Tax software providers, on the other hand, routinely send emails to customers about the status of their refunds. As a result, even tech-savvy consumers may open an email disguised to resemble an alert from TurboTax or HR Block.
A generic or overly familiar salutation is another sign that the email is fake, Frietchen says. (She recalls receiving an email purportedly from the IRS that addressed her as “Hello, dear.”) Another warning sign: emails that contain grammatical errors or awkward language that sounds like “translated instructions for flat-pack furniture,” Frietchen says.
Still not sure? Instead of opening the email, go to the tax software company’s website and log in, Frietchen says. If the company sent you a legitimate alert, you should be able to find it there. You can also look for examples of fraudulent emails in the website’s anti-fraud section.
•Fraudulent tax returns. Armed with stolen Social Security numbers, identity thieves have filed thousands of fraudulent tax returns and collected billions of dollars in tax refunds.
Victims usually don’t know a tax return was filed in their name until their actual tax return is rejected by the IRS, says Lu-Ann Dominguez, a tax attorney with Gunster, a law firm based in Fort Lauderdale. Some taxpayers have had to wait up to a year for their refunds while the IRS investigated, she says.
To avoid having your identity stolen, guard your Social Security number, Dominguez says. Don’t give it to your doctor, dentist or other business. Finishing your taxes early is another way to protect yourself: Once you’ve filed, a crook can’t file in your name.