With the emergence of a new tax fraud scheme, The Internal Revenue Service is urging tax professionals to step up security and beware of phishing emails that can secretly download malicious software that can help cybercriminals steal client data.
Only a few days into the filing season, a scam was identified that began with cybercriminals stealing data from several tax practitioners’ computers and filing fraudulent tax returns.
Tax refund fraud affects hundreds of thousands, if not millions, of U.S. citizens annually. Victims usually first learn of the crime after having their returns rejected because scammers beat them to it.
The Internal Revenue Service said, on Thursday, that the personal data of as many as 100,000 taxpayers could have been compromised through a scheme in which hackers posed as students using an online tool to apply for financial aid. According to The New York Times, the breach has the potential of being the most extensive since the 2015 tax return incident when info on over 300,000 taxpayers was used to file false claims. The IRS later increased that estimate to potentially affect 700,000 people.
Looking forward to your tax return? You might be too late.
The IRS issued a warning of one of the “most dangerous… email phishing scams we’ve seen in a long time.” As a result, thousands of legitimate tax returns are being rejected, because scammers already filed fraudulent tax returns on behalf of the victims. Using stolen W-2 information, scammers can file falsified tax returns, and the IRS issues your refund to those scammers. When you get around to filing your legitimate tax return, the IRS database shows that you have already received your tax refund.