IRS Scams During Tax Season
As a Managed Security Service Provider (MSSP), we understand that tax season can be a stressful time for small and medium-sized businesses (SMBs). Unfortunately, cybercriminals are well aware of this too, and often use this time of year to launch IRS scams. Below we’ll discuss common IRS scams that SMBs should be aware of, red flags to watch out for, security tips to protect themselves, and how to report scams.
Common IRS Scams
IRS scams come in many forms, but some of the most common include:
Phishing IRS Scams
Phishing scams involve scammers sending fake emails, text messages, or making phone calls posing as the IRS. The aim of the scam is to trick SMBs into giving away their sensitive information, such as their Social Security number, bank account information, or credit card details. Scammers often use social engineering tactics to create a sense of urgency or fear, making it more likely that businesses will fall for the scam. To avoid falling for phishing scams, be wary of unsolicited communications and verify the legitimacy with the IRS directly.
Impersonation IRS Scams
In impersonation scams, scammers impersonate IRS agents or law enforcement officials and demand payment for taxes owed. They may threaten SMBs with legal action or arrest if they don’t comply. These scams often involve phone calls or emails, and scammers often use spoofing technology to make it appear as if they are calling from the IRS. To avoid falling for this scam, know that the IRS will never threaten your business in this way and verify the legitimacy of requests like this with the IRS directly.
Fake Refund Scams
Fake refund scams involve scammers contacting SMBs and claiming that they are eligible for a refund from the IRS. They may ask for personal information to process the refund or offer to file a tax return on their behalf. These scams are often carried out via email or social media. To avoid falling for this scam, be aware that the IRS will never initiate contact to offer your business a refund.
Fake Tax Preparers
Some hackers pose as tax preparers to steal sensitive information from SMBs. They may offer to prepare tax returns for a low fee, but in reality, they are stealing personal and financial information from your business. This can lead to identity theft and financial loss. To avoid falling victim to fake tax preparers, only use reputable tax preparation services. You should research tax preparers online and check their credentials before using their services. Also be cautious of tax preparers who ask for cash payments or offer to deposit refunds into your personal bank accounts.
Red Flags
SMBs should watch out for the following red flags that may indicate an IRS scam:
Unsolicited Communication
The IRS will never initiate contact with taxpayers by phone, email, or social media to demand payment or request personal information. Scammers often use these methods to impersonate IRS agents and trick SMBs into giving away their sensitive information. If in doubt, contact the IRS directly to verify the legitimacy of the communication.
Threats or Intimidation
The IRS will not use threats or intimidation tactics to collect taxes or demand payment. Scammers often impersonate IRS agents or law enforcement officials and threaten SMBs with arrest, deportation, or legal action if they don’t comply. If you receive a call or message that makes such threats, hang up immediately and report the incident to the IRS.
Payment Requests
The IRS will never ask SMBs to make payments using gift cards, wire transfers, or cryptocurrency. Scammers often ask for payment in these forms because they are difficult to trace and recover. To avoid falling for this scam, be aware that the IRS only accepts payments by check or credit card. If you receive a request to make payment in any other form, be highly suspicious and report it to the IRS.
Security Tips
To protect your business from IRS scams, can take the following security tips:
- Verify the identity of the caller: If your business receives a phone call from someone claiming to be from the IRS, you should ask for their name, badge number, and callback number. You can then verify the caller’s identity by calling the IRS directly.
- Keep personal information secure: You should never give out your Social Security number, bank account information, or other sensitive business information unless you are certain of the recipient’s identity.
- Use strong passwords and multi-factor authentication: Always use strong passwords for your financial accounts and enable multi-factor authentication whenever possible.
- Back up data regularly: Back up your financial data regularly and store the backups in a secure location, preferably offsite.
How to Report IRS Scams
If you suspect that you have been targeted by an IRS scam, report it to the appropriate authorities. You can do so by:
- Contacting the IRS directly: You can call the IRS toll-free at 1-800-829-1040 to report a scam.
- Contacting the Federal Trade Commission (FTC): You can file a complaint with the FTC at ftc.gov/complaint.
IRS scams are a common threat during tax season, SMBs should be aware of the risks and take proactive steps to protect themselves. Empowered IT Solutions can help your business protect itselves against tax scams by providing education and training, securing its systems, monitoring its accounts, and reporting suspicious activity. By working with a trusted IT partner like us, your business can take proactive steps to protect its sensitive information and avoid falling victim to any type of scam.